Export Credit Agencies & Extractive Industry Companies

International Financial Institutions: Transparency and disclosure
requirements for the extractive sector

Export-Import Credit Agencies
Class of The Resource Curse, Fall 2013, The New School University
Table of Contents
INTRODUCTION ........................................................................................................................................ 4
LIST OF ACRONYMS................................................................................................................................. 5
1 EXPORT-IMPORT BANK OF CHINA................................................................................................. 6
1.1 TRANSPARENCY POLICIES ...........................................................................................................................7
1.1.1 Payment Disclosure ............................................................................................................................... 7
1.1.2 Contract Disclosure................................................................................................................................ 7
1.1.3 Mechanisms of Compliance ................................................................................................................ 8
1.1.4 Accessibility of Information ............................................................................................................... 8
1.2 ASSESSMENT OF TRANSPARENCY AND DISCLOSURE REQUIREMENTS .................................................8
1.3 CONCLUSIONS ................................................................................................................................................9
2 THE KOREAN EXPORT IMPORT BANK ....................................................................................... 10
2.1 FINANCING IN THE EXTRACTIVE SECTOR ............................................................................................ 10
2.2 TRANSPARENCY POLICIES ....................................................................................................................... 10
2.2.1 Accessibility of Information ............................................................................................................11
2.2.2 Enforcement Mechanisms .................................................................................................................11
2.2.3 Dodd-Frank, EU Directives, and IFC Sustainability Framework ..................................11
3 UNITED KINGDOM EXPORT FINANCE DEPARTMENT .......................................................... 13
3.1 FINANCING IN THE EXTRACTIVE SECTOR .............................................................................................. 13
3.2 TRANSPARENCY AND ACCOUNTABILITY POLICIES............................................................................... 13
3.2.1 Accessibility of Information .............................................................................................................16
3.2.2 Enforcement Mechanisms .................................................................................................................16
3.2.3 Dodd-Frank, EU Directives, and IFC Sustainability Framework.....................................16
4 COMPAGNIE FRANAISE D'ASSURANCE POUR LE COMMERCE EXTRIEUR ................. 18
4.1 BACKGROUND ............................................................................................................................................. 18
4.1.1 Scope and Size of the Problem ........................................................................................................18
4.1.2 Assessments from secondary sources ..........................................................................................19
4.2 TRANSPARENCY ......................................................................................................................................... 19
4.2.1 Payment and Contract Disclosure.................................................................................................19
4.2.2 Mechanisms of Compliance ..............................................................................................................21
4.2.4 Comparison of Coverage....................................................................................................................22
4.3 RECOMMENDATIONS ................................................................................................................................. 22
5 UNITED STATES EXPORT IMPORT BANK ................................................................................. 23
5.1 BACKGROUND ............................................................................................................................................. 23
5.1.1 Reforms made to the Banks Policies ...........................................................................................23
5.1.2 Financing in the Extractive Sector: Capital & Companies .................................................24
5.2 TRANSPARENCY POLICIES SPECIFIC TO THE EXTRACTIVE INDUSTRIES ........................................... 27
5.2.1 The Extractive sector within Ex-Im Banks Policies..............................................................27
5.2.2 Transparency Policies and Extractive Projects ......................................................................30
5.2.3 Mechanisms of compliance...............................................................................................................32
5.3 GAPS, WEAKNESSES, AND RECOMMENDATIONS ................................................................................... 35
5.3.1 Contract and Payment transparency ..........................................................................................35
5.3.2 Compliance with external standards and guidelines ...........................................................35
5.3.3 Monitoring and enforcing mechanisms......................................................................................35
5.3.4
Accessibility of Information .............................................................................................................36
6 ANNEXES............................................................................................................................................... 37
6.1 EXPORT-IMPORT BANK OF CHINA .......................................................................................................... 37
6.2 KOREA EXPORT IMPORT BANK ............................................................................................................... 37
6.3 COMPAGNIE FRANAISE D'ASSURANCE POUR LE COMMERCE EXTRIEUR...................................... 37
6.4 UNITED KINGDOM EXPORT FINANCE DEPARTMENT .......................................................................... 38
6.4.1 Advocacy Recommendations ...........................................................................................................38
6.4.2 Annex - UKEF Extractive Industry Projects Funded from 2010-2013..........................39
6.5 UNITED STATES EXPORT IMPORT BANK ............................................................................................... 42
6.5.1 Projects complying with Equator Principles............................................................................42
6.5.2 Extractive projects supported by US Ex-Im Bank. .................................................................43
6.5.3 Tables and Graphs ................................................................................................................................43
Introduction
Terra Lawson-Remer, J.D., PhD, Assistant Professor
Manuel Valderrama Florez, PhD Student
The present report is product of a collaborative research project between Revenue Watch
Institute and the Studley Program in International Affairs at The New School University. The
project sought to provide background analysis for potential broad-based coalition efforts to
improve global governance of extractive industries, by promoting the transparent and
accountable management of oil, gas and mineral resources. For this, the research addressed
two main topics: a) transparency and disclosure requirements in the official development
finance (private sector development loans and sovereign risk guarantees) from bilateral
import-export credit agencies and multilaterals, and b) beneficial ownership in the
extractive industries sector. These distinct arms were developed and materialized in two
respective deliverables. All research and their respective deliverables were executed and
written by the class of the Resource Curse course of the fall semester of 20131.
The main objective of the first arm of the research project was to examine the current
requirements of International Finance Institutions regarding revenue, payment, and
contract disclosure. In addition to mapping these said requirements, the project also
assessed how did these compare to those included in the 2012 IFC Sustainability
Framework, and to new US-EU mandatory disclosure rules through stock market
regulations (e.g., Cardin-Lugar); examined the different enforcement mechanisms deployed
by all IFIs; determined the accessibility of the information that was being disclosed if any-;
and, estimated the coverage of stock market regulations in terms of projects and capital
where possible-. The researchers used existing RWI comments on IFI policies (e.g. EBRD
and US Ex-Im), international good practices (e.g. IMF Guide on Resource Revenue
Transparency), New Schools Resource Curse course literature, and other secondary
literature, for the assessments. Additionally, the project also described the key stakeholders
and decision makers of the IFIs examined.
Due to its extent, the deliverable for the first arm of this research was divided into two
reports, according to the type of IFI: a) Development Finance Institutions (DFI), and b)
Export-Credit Agencies (ECA). This document addresses transparency and disclosure
requirements in Export Credit Agencies. Each chapter develops the above-mentioned
research objectives to the extent that was possible due to information constraints2-, and
presents the results in four broad sections: background information of each DFI, contract
and payment transparency requirements, a comparison of these said requirements with
mandatory disclosure rules through stock market regulations, and policy recommendations.
The DFIs examined in this document are the following:
i)
ii)
iii)
iv)
v)
Export-Import Bank of China

Korean Export-Import Bank,
United Kingdom Export Finance Department,
Compagnie Franaise d'Assurance pour le Commerce Extrieur,
United States Export-Import Bank
Except Chapter 6 - The United States Export-Import Bank of the report dedicated to Export-Import Credit
Agencies, which was developed Manuel Valderrama Flrez, PhD Student at The New School University.
2 Since we are dealing with transparency requirements, not all IFIs have included these sort of reforms in to
their policies.
1
List of Acronyms
ADB: Asian Development Bank
AfDB: African Development Bank
ATI: Aid Transparency Index
BTC Pipeline: BakuTbilisiCeyhan pipeline
China ExIm: The Export-Import Bank of China
COFACE: The Compagnie Franaise d'Assurance pour le Commerce Extrieur
COO: Country of Operation
CSE: Civil Society Engagement Unit
CSO: Civil Society Organization
EA: Environmental Analyses
EU: European Union
EBRD: European Bank for Reconstruction and Development
ECA: Export-Credit Agency
ECG: Export Credits and Credit Guarantees
EI: Extractive Industry
EIA: Environmental Impact Assessments
EITI: Extractive Industry Transparency Initiative
ESHR: Environmental, Social and Human Rights
ESIA: Environment and Social Impact Assessment
ESMR: Environmental and Social Management Reports
ESS: Environmental and Social Strategies
EU: European Union
Dodd-Frank: Dodd- Frank Wall Street Reform and Consumer Protection Act
ICC: Inter-American Investment Corporation
IDB: Inter-American Development Bank
IFC: International Finance Corporation
IFI: International Institution
JBIC: The Japan Bank for International Cooperation
KEXIM: Korea Export Import Bank
LAC: Latin America and the Caribbean
MIGA: The Multilateral Investment Guarantee Agency
OECD: Organization for Economic Cooperation and Development
OPIC: Overseas Private Investment Corporation
PCM: Project Complaint Mechanism
PIP: Public Information Policy
PSD: Project Summary Document
PWYP: Publish What You Pay
RWI: Revenue Watch Institute
SCF: Structured and Corporate Finance
SDR: Special Drawing Rights
SEA: Strategic Environmental Analyses
SEC: U.S. Securities and Exchange Commission
US Ex-Im: United States Export Import Bank
UKEF: United Kingdom Export Finance Department
WBG: World Bank Group
1 Export-Import Bank of China3

The China Export Import Bank (China ExIm) is one of a myriad of government financial
institutions of the Peoples Republic of China. ExIm, thanks to massive cash reserves
generated by Chinas export lead growth model, is becoming a key player on the
international stage in its own right. It is one of the largest suppliers of credit in the world,
and is pivotal part of Chinese foreign and economic policy. The vast majority of its operations
have to do with granting concessional loans to foreign governments, often in the developing
world, and often in exchange for some sort of resource procurement. Chinese growth is
leading to increased demands for fossil fuels and its massive industrial output demands raw
materials. In addition, Chinese construction has overheated domestically so the government
has been deflecting growth outward to cool things down, while at the same time securing
favorable resource extraction deals from foreign governments by exchanging credit and
infrastructure projects for favorable trade terms. This particular confluence of economic
streams has led decision makers in Beijing to focus on Africa. As Zhao Changhui explains in
an interview with the Hong Kong daily broadsheet, the South China Morning Post, "We have
plenty of money to spend. We have the budget for major projects. China has US$3.5 trillion
of reserves, which cannot just buy US treasuries. We need to use part of them in overseas
investments. Africa for the next 20 years will be the single-most important business
destination for many Chinese mega corporations Zhoa said, before claiming that China
ExIm will oversee most of the $1 trillion in loans and investment that will from the Chinese
government agencies to Africa in the next decade or so4.
According to its 2012 annual report, China Exim Bank has loaned 8.81 percent of its total
65.39 billion, or $7.88 billion, for 30 projects related to Power5:
Graph 1: China ExIms 2012 portfolio, by sector - Source: 2012 Annual Report
Report elaborated by Yousef Khalil, khaly129@newschool.edu, The New School University.

Han Shih, Toh. South China Morning PostChina to provide Africa with US$1tr. financing. Last modified
November 18, 2013 http://www.scmp.com/business/banking-finance/article/1358902/china-provide-africaus1tr-financing
5 China Exim Bank, "2012 Annual Report." Last modified 2013. Accessed October 15, 2013.
http://english.eximbank.gov.cn/annual/2012/201208.pdf.
3
4
2012: Export of Jack-Up Rigs, Dalian Shipbuilding Industry Co., Ltd. (Norway)
2012: Advanced oil processing center at Atyrau Oil Refinery Plant, Kazakhsta
2007: Export of offshore Drilling Platform: Provided USD 335.6 million co-financing
to Norway Awilco6.
As figures are not broken down by industry in annual reports before 2012, numbers for
extractive industry loans can be estimated for the last decade by taking the 8.81 percent
figure from the 2012 annual report and applying it the figures of total loans from the
previous ten years of reports. While it is not possible to determine the numbers
definitively unless the ExIm bank reports them, this method allows for a reasonable
estimate of 53.511 billion USD in total loans to extractive industry projects over the last
decade.
Year Total Loans According to Annual Reports Total Loans to Extractive Industry
2012 $104,062,400,000.00
$9,157,491,200.0000
2011 $113,210,139,520.00
$9,962,492,277.7600
2010 $94,701,592,240.00
$8,333,740,117.1200
2009 $70,794,264,532.80
$6,229,895,278.8864
2008 $72,198,436,800.00
$6,353,462,438.4000
2007 $51,368,789,600.00
$4,520,453,484.8000
2006 $37,067,222,560.00
$3,261,915,585.2800
2005 $28,015,816,480.00
$2,465,391,850.2400
2004 $20,045,740,480.00
$1,764,025,162.2400
2003 $16,624,930,560.00
$1,462,993,889.2800
Total $608,089,332,772.8000
$53,511,861,284.0064
Table 1: Estimated total of loans from China ExIm to extractive industry projects, fiscal period 20032012 Source: Own estimation based on 2012 data.
China Exim publishes revenue figures in its annual reports. These figures are not broken
down by sector or recipient state, however. According to the 2012 report, the Exim Bank
had a net revenue of 3,858,548,000RMB or 633,318,917 USD.
1.1 Transparency Policies

1.1.1 Payment Disclosure
China Exim Bank has no specific payment disclosure requirements for extractive industries.
If figures are available, they are made so by recipient governments
1.1.2 Contract Disclosure

As with payment disclosures, China Exim Bank has no specific payment contract disclosure
requirements for extractive industries. If figures are available, they are made so by
recipient governments. The terms of extractive contracts are integral to Chinese foreign
policy and are therefore not made widely available to the public.
6
China Exim Bank, "2012 Annual Report."
1.1.3 Mechanisms of Compliance

There are no specific requirements for China Exim Bank at the moment, although it does
publish top line figures in its annual review.
1.1.4 Accessibility of Information

The Banks website has its entire annual reports available online going back to 2003,
although the 2003 report is only available in Chinese. They are available in are available
in English from 2004 on however, the links to the PDF documents currently are not
functioning for all but the last four annual reports, and those reports that are accessible are
cumbersome to navigate and slow to load.
1.2 Assessment of Transparency and Disclosure Requirements

The China Exim Bank operates as an integral component of Chinese foreign policy. One of
Chinas primary foreign policy goals is the procurement of natural resources and the
stimulation of the industrial added value exports. Details about the specific terms and
figures for its bilateral agreements are not widely released in English or Chinese. Like the
rest of the Peoples Republic of Chinas (PRC) development aid and foreign investment
institutions, the Exim Banks data and power structure is notoriously opaque.
Natural resource procurement, a key component of Chinese national security interests,
is conducted through institutions such as the Exim Bank through the exchange of
concessional loans or infrastructure projects for natural resource import deals with
recipient states. The infrastructure projects are used to subsidize Chinese contractors,
which have been looking to expand overseas, having overheated the domestic market in
spectacular fashion over the last decade. This strategy has been widely studied as it has
been implemented in Africa, where the China Exim bank finances roughly half of all Chinese
loans. China is expected by some analysts to reach its ambitious goal of providing African
states with more than $20 billion in loans by 2015. In the extractive sector, projects like a
$3 billion offshore oil processing plant, onshore trunk pipeline, and petroleum terminal in
Ghana are common across the continent. This particular deal was accompanied by a
concurrent agreement with Sinopec, the PRCs national petroleum company, which was
guaranteed the 13,000 barrels per day of crude oil.7 US Department of State officials
estimate that the China Exim Bank provides more international loans than all the rest of the
G7 countries combined. Officials from rival Exim banks, including that of the United States,
have criticized the China Exim Bank for not complying with OECD financial guidelines,
which they claim gives the bank an unfair advantage.8
Researchers and journalists looking to analyze Chinese aid policy must often resort to
slightly better Chinese language sources, Chinese academics, or Chinese media outlets, the
latter are closely associated with the state, however. Even these sources are often
incomplete.
Nyabiage, Jevans. Standard Digital, "China Development Bank leads Beijings soft power agenda." Last modified
October 14, 2013. Accessed October 15, 2013.
http://www.standardmedia.co.ke/?articleID=2000095579&story_title=chinaXdevelopmentXbankXleadsX
beijingXsXsoftXpowerXagenda.
8 Wall Street Journal, "U.S. Export Financing Challenges China." Last modified October 14, 2013. Accessed October
15, 2013. http://online.wsj.com/news/articles/SB10001424052748704515904576076144043327686.
7
Although Chinese language sources are vital in providing some of these details that might
otherwise be missed, they are unfortunately incomplete in that they do not report all, or
even the majority of concessional loans that are made. They allow us to better educate our
guesses about typical loan size and sector, but do not provide enough information with
which to analyze Chinese lending systematically.9
The PRC government has released specifics, sporadically since 1997, but in incomplete
segments that highlight achievements exclusively. Some analysts argue that the Chinese
government is purposely opaque because revealing terms of concessional loans may
expose the nominally development aid as a commercial subsides program, negating the
ability of the PRC to cultivate goodwill from the international perception of its robust
development program.10 Finding information on Chinese aid is like putting together a
jigsaw puzzle. This is of course also the case with other donors but the missing pieces are
still larger and often less comparable in the case of China.11 Beijing may also be opting to
keep country by country data secrete to prevent recipient countries from understanding
regional policy strategies. There are domestic considerations that could also weigh heavily
on PRC decision makers, as it would certainly prove politically toxic to disclose the extent
of aid to other countries given the massive internal contradictions of the Chinese economic
expansion.
1.3 Conclusions
The China ExIm Banks transparency needs to be reformed in general. Its annual reports are
vague, offering no country-by-country or project-by-project numbers. The inclusion of these
figures in future reports would be a satisfactory initial step. Publishing these figures would
alleviate anxieties in the developing world, particularly in Africa, about the intentions of
Chinese aid policies and contribute to a more inclusive approach to development aid and
Chinese foreign investment. Chinese institutions have shown remarkable resilience and very
low transparency or accountability by Western standards and will likely be unresponsive to
external pressure to change. Despite Chinas recent efforts to move toward sustainable
energy sources, its massive industrial boom has been fueled by archaic and dirty fuel sources
like open fire coal power plants. The effects of the lack of environmental concern of the last
few decades are being felt now as cities across the country are frequently enveloped in
hazardous smog. There have been signs of a growing environmental movement12 as a result,
which though aimed at domestic problems, may open avenues for influencing Beijing in its
sometimes pollution prone extractive industry funding abroad.
Hubbard, Paul. Center For Global Development, "Aiding Transparency: What We Can Learn About China ExIm
Banks Concessional Loans." Last modified September 2007. Accessed October 15, 2013., 3
10 Ibid., 7
11 Grimm, Sven. PublishWhatYouFind; The Global Campaign for Aid Transparency, "Transparency of Chinese Aid:
an analysis of the published information on Chinese external financial flows." Last modified September 2007.
Accessed October 15, 2013.
http://www.ccs.org.za/wpXcontent/uploads/2011/09/TransparencyXofXChineseXAid_finalXforXprint.pdf.
12 Perkowski, Jack. Forbes, Environmentalism Comes to China. Last modified June 30, 2012.
http://www.forbes.com/sites/jackperkowski/2012/07/30/environmentalism-comes-to-china/
9
2 The Korean Export Import Bank13

The Republic of Korea established the Korean Export Import Bank (KEXIM) in 1976 to
promote Korean exports and improve Korean economic development. It offers export loans,
trade finance, and guarantees to Korean companies or to companies that are heavily
invested in by Korean companies. It also administers programs aimed at the reunification of
the Korean peninsula.14 The U.S. State Department states that corporate social responsibility
in South Korea is still in its infancy. The State Department has criticized Korean companies
disclosure of social responsibility reports.15
2.1 Financing in the Extractive Sector

The Korean Exim Bank only funds projects that involve Korean owned companies or
companies heavily invested in by a Korean owned company. The types of projects financed
by the bank include all stages of oil, gas and mining development and agricultural
investment. Information is only available in the aggregate and there is very little
breakdown. The bank currently has $41 million invested in quarrying and mining
worldwide and $3 million invested in electricity, gas, steam, and water supply industries.16
2.2 Transparency Policies

The bank states that it follows generally accepted disclosure practices as they exist in South
Korea and it claims to have adopted transparent management practices to increase public
trust.
According to article 89 of the Financial Services Commission17:
1) A financial institution shall precisely disclose its contract terms of financial transactions
in order to protect the rights and interests of its customers.
2) A financial institution shall not behave in any manner under the following items when
disclosing the contract terms under Paragraph (1):
a) Express affirmatively or roughly on matters not determined precisely yet in relation
to financial product transaction;
b) Express in misleading or ambiguous way on comparative advantages over other
financial products without providing any specific grounds; and
c) Employ terms that may give rise to misunderstanding or dispute.
3) The Governor shall determine necessary matters to be disclosed to the public including
contract terms and transaction costs, etc.
The New Schools students Masha Katz -Katzm969@newschool.edu-, Justin Coburn cobuj499@newschool.edu-, Emma Stoskopf-Ehrlich -stose168@newschool.edu-, Jonatthan Leonard Leonj726@newschool.edu-, and Jaron Vogelsang -vogej566@newschool.edu- elaborated this section.
14 Foreign Investment Statistics. Korea Eximbank. Accessed 02Nov13. http://211.171.208.92/odisas_eng.html
15 2013 Investment Climate Statement: Republic of Korea. U.S. State Department. Accessed 02Nov13.
http://www.state.gov/e/eb/rls/othr/ics/2013/204670.htm
16 Natural Resources Development Credit. Korea Eximbank. Accessed 02Nov13.
http://www.koreaexim.go.kr/en/banking/Natural.jsp
17 Regulation on Supervision of Banking Business. Financial Services Commission. 03May07.
http://fsc.go.kr/eng/lr/list.jsp?menu=0302&bbsid=BBS0055
13
10
However, article 94 states that18:

1) The provisions of Articles 5 through 25, Article 26, Paragraph (1), Item 2, Article 26,
Paragraph (3), Article 32, Paragraphs (3) through (5), Articles 33 through 48, Article 50,
Article 51, Articles 52-2 through 52-5, proviso of Article 53, Paragraph (1), Article 54,
Article 59, Article 74, Articles 79 through 89, and Article 91 shall not apply to the
KEXIM. <Amended on September 23, 2002>
2) The Governor may forbear to order the KEXIM to write-off specific bad assets pursuant
to Article 27, Paragraph (7) if it judges that the order may cause any diplomatic or
commercial problems.
3) Unless prescribed otherwise in this Regulation, the provisions under Article 92,
Paragraph (3), and Paragraphs (5) through (8) shall apply to the KEXIM.
There seems to be no requirements by the bank to obligate or even just to encourage
borrowers to disclose revenue, payments, or contracts.19

Information on the Korean Exim Bank is very difficult to access. Its website lacks a search
function and information is extremely disorganized. The bank's website states that
English language pages were not official pages bank documents. All official documents for
the bank are in Korean that significantly limits accessibility of information on bank
policies and projects.
2.2.2 Enforcement Mechanisms

There does not appear to be any requirements to enforce.
2.2.3 Dodd-Frank, EU Directives, and IFC Sustainability Framework

The Korean Exim Bank has a very minimal transparence and accountability framework.
As such, if it was to implement policies in the IFC framework, nearly all of its policies and
procedures relating to transparency and accountability would be rewritten and
changed.20
It is unclear how Dodd-Frank and the EU Directives will affect the companies that
typically borrow from this bank. The Korean EXIM Bank is completely controlled and
funded by the Korean government. 21 Furthermore, it only funds Korean owned
companies or foreign companies where a Korean company has a serious investment22.
Since Dodd-Frank only applies to companies listed in U.S. stock exchanges it is unlikely to
Regulation on Supervision of Banking Business. Financial Services Commission. 03May07.
19 Banking Regulations Korean Financial Services Commission. Accessed on 02Nov13.
20 Banking Regulations Korean Financial Services Commission. Accessed on 02Nov13.
21 Ibid.
22 Natural Resources Development Finance. Korea EximBank. Accessed 02Nov13.
http://www.koreaexim.go.kr/en/banking/Natural.jsp
18
11
have much of an impact on the Korean Exim Bank since it only lends money to Korean
companies. The bank does not publish which companies have received loans from it so it is
hard to determine what effect Dodd-Frank will have in regards to borrowers of this
institution.
According to the New York Stock Exchange only nine Korean companies are listed on the
U.S. exchanges.23 These companies are KB Financial, Korea Electric Power, KT Corporation,
LG Display, MagnaChip, POSCO, Shinhan Financial, SK Telecom, and Woori Finance.
Korean Economic Summit at the NYSE. New York Stock Exchange. Accessed 18Nov13.
https://exchanges.nyx.com/marc-iyeki/korea-economic-summit-nyse
23
12
3 United Kingdom Export Finance Department24

The United Kingdom Export Finance Department (UKEF) formerly known as Exports
Credits Guarantee Department (ECGD) is the UKs export credit agency and the oldest
national export bank in the world having started in 1919.25 The purpose of UKEF is to
complement the private market by providing assistance to exporters and investors,
principally in the form of insurance and guarantees to banks. The two primary policies of
UKEF are achieving strong and sustainable economic growth and increasing the UKs
exports and attracting inward investment.
3.1 Financing in the Extractive Sector

These figures are unclear because they are not coded in a way that indicates that projects
are part of extractive industries. UKEF funded UK businesses a total of 4.3 billion in 20122013, this is an increase from 2.3 billion in 2011-2012.26 UKEF is supporting industries
including aerospace, automotive, oil and gas and defense. Their funding ranges from as
little as 4,000 to 2 billion and has allowed for UK businesses to export to 58 countries
around the world27.
UKEF publishes partial information regarding the companies it insures and the projects
they support. There is partial project information in their annual reports going back three
years. All available projects are listed in Annex 6.42 - UKEF Extractive Industry Projects
Funded from 2010-2013.
3.2 Transparency and Accountability Policies

UKEF states in its annual report that a principle it holds in conducting its business is to
take account of factors beyond purely financial and of relevant government policies in
respect of environmental, social and human rights impacts; debt sustainability; and bribery
and corruption.
In 2000, UKEF introduced the Business Principles and an associated Business Principles
Unit after a comprehensive review of the department. Secretary of State, Stephen Byers,
designed the principles for Trade and Industry with the intention to promote a responsible
approach to business and ensure our activities take into account the Governments
international policies, including those on sustainable development, environment, human
rights, good governance and trade.28 The Business Principles Unit was charged with
The New Schools students Masha Katz -Katzm969@newschool.edu-, Justin Coburn cobuj499@newschool.edu-, Emma Stoskopf-Ehrlich -stose168@newschool.edu-, Jonatthan Leonard Leonj726@newschool.edu-, and Jaron Vogelsang -vogej566@newschool.edu- elaborated this section.
25 "Case Studies." Clean Up Britain's Exports. Injustice Guaranteed, n.d. Web. 18 Oct. 2013.
<http://cleanupexports.org.uk/casestudies/>.
26 UK Export Finance. UK Export Finance Support to British Exporters at 12-year High.UK Export Finance. GOV.UK,
20 June 2013. Web. 18 Oct. 2013. <https://www.gov.uk/government/news/uk-export-finance-support-tobritish-exporters-at-12-year-high>.
28 A History of Neglect UK Export Finance and Human Rights. Rep. Amnesty International, June 2013. Web.
<http://www.amnesty.org.uk/uploads/documents/doc_23288.pdf>.
24
13
implementing an assessment call the Case Impact Analysis Process. The CIAP would then
inform the review of applications to the UKEF.29
In 2010 UKEF abandoned the Business Principles and closed the BPU. Corner House is a UKbased advocacy organization and has written several different reports about UKEF. The a
report titled Turning a Blind Eye, Corruption and the UK Export Credits Guarantee
Department by Dr. Susan Hawley, the author wrote,
Its [UKEF] decision in 2011 to abandon its previous Business Principles and to exempt
applications under 10 million in value or with repayment terms of less than two years from
mandatory environmental and social assessment means that it is moving away from
compliance with the EU acquis30, not closer to it31.
In 2008 the Working Party on Export Credits and Credit Guarantees (ECG) within the
Organization for Economic Cooperation and Development (OECD) wrote the Principles and
Guidelines to Promote Sustainable Lending Practices in the Provision of Official Export
Credits to Low Income Countries.32 The ECG also wrote the OECD Common Approaches or
the Recommendation of the Council on Common Approaches for Officially Supported Export
Credits and Environmental and Social Due Diligence that was also adopted in June 2012.33
The UK is a member of OECD and UKEF is a member of ECG more specifically, therefore
UKEF is obligated to follow these policies and regulations.
UKEF explains in their Guidance to Applicants: Processes and Factors in the UK Export
Finance Consideration of Application:
ESHR Impacts. In relation to ESHR impacts, and consistent with the OECD Common
Approaches, UK Export Finance will review a project against appropriate international
standards dealing with ESHR impacts where: (i) the export credit has a repayment term of
two years or more; and (ii) the project in respect of which the export is to be made is a new
commercial, industrial or infrastructure undertaking at an identified location or where there
is a material change in output or function to an identifiable existing project; and 2
www.oecd.org (iii) where the total amount of UK Export Finance support for a contract or
contracts is equal to or greater than the equivalent of Special Drawing Rights (SDR) 10
million or the project is in or near a sensitive area; and (iv) the project is classified as either
category A or category B within the terms of the OECD Common Approaches34.
IBID.
Asset
31 Hawley, Susan, Dr. Turning a Blind Eye, Corruption and the UK Export Credits Guarantee Department. Rep.
Corner House, June 2003. Web. 17 Nov. 2013.
<http://www.thecornerhouse.org.uk/sites/thecornerhouse.org.uk/files/correcgd.pdf>.
32 Principles and Guidelines to Promote Sustainable Lending Practices in the Provision of Official Export Credits to
Low Income Countries. Publication. Organization for Economic Co-operation and Development, 22 May 2008.
Web. 7 Dec. 2013.
<http://search.oecd.org/officialdocuments/displaydocumentpdf/?cote=TAD/ECG(2008)15&doclanguage=en>.
33 Recommendation of the Council on Common Approaches for Officially Supported Export Credits and
Environmental and Social Due Diligence. Publication. Organization for Economic Co-operation and Development,
28 June 2012. Web. 7 Dec. 2013.
29
30
Guidance to Applicants: Processes and Factors in UK Export Finance Consideration of Applications. Publication.
UKEF- UK Government, 3 Oct. 2012. Web. 7 Dec. 2013.
<https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210648/guidance-onprocesses-and-factors-ukef.pdf>.
34
14
This is commitment is in accordance with the ECG Common Approaches. The Common
Approaches document is not specifically about extractive industries but considers more
broadly the environmental and social impact in the lending sector across various industries.
As noted above, ECG members are required to closely monitor projects in Category A and
release information about these projects to the public. Category A is defined as:
a project is classified as Category A if it has the potential to have significant adverse
environmental and/or social impacts, which are diverse, irreversible and/or unprecedented.
These impacts may affect an area broader than the sites or facilities subject to physical
works. Category A, in principle, includes projects in sensitive sectors or located in or near
sensitive areas. An illustrative list of Category A projects is set out in Annex I. 35
After reviewing Annex 1 regarding Category A, the researchers determined that extractive
industries fall into this category:
Operations that involve large scale extraction, via underground or open-pit mining, solution
mining, or marine or riverine operations to obtain precious metals, base metals, energy and
industrial minerals, or construction materials. It may also include the processing of the
extracted material. Large scale oil, gas, or liquefied natural gas development that may
include any or all of: exploration (seismic and drilling); field development and production
activities; transport activities, including pipelines/terminals, pump stations, pigging stations,
compressor stations and associated facilities; or gas liquefaction facilities.36
UKEF is required by ECG Common Approaches to conduct an environmental and social

impact assessment for all Category A projects, namely their extractive projects. They are
required to make these reports public along with detailed information about each extractive
project. ECG members are also required to meet all ten of the World Bank Safeguard Policies
or all eight IFC Performance Standards.
As a member of ECG, UKEF is required to adopt and implement these policies and
procedures of project monitoring, evaluation and disclosure. UKEF has adopted ECG policies
and demonstrate this in the Guidance to Applicants document. UKEF is listing a selection of
project details in their annual report but has been doing so since before these policies were
adopted. It is unclear if and how the UKEF is implementing these policies, the researcher
was unable to locate the reports required for extractive Category A projects. Additionally
given that UKEF is giving funding and offering insurance to companies that implement
extractive projects, they are not in the position to conduct an ESIA or even to publish the
company ESIA report. The implementation of the ECG policies for Category A projects in
now explicitly described by UKEF and there is no evidence of its implementation.
There are no clear requirements regarding revenue, payment and contract disclosure at
UKEF or ECG. There are a few organizations that have released reports or published articles
about the lack of transparency at UKEF. Clean Up Britains Exports is a website that uses
Recommendation of the Council on Common Approaches for Officially Supported Export Credits and
28 June 2012. Web. 7 Dec. 2013.
36 Recommendation of the Council on Common Approaches for Officially Supported Export Credits and
28 June 2012. Web. 7 Dec. 2013.
35
15
case studies of UKEF projects to illustrate their concerns with the transparency of the
agency. Amnesty International June 2013 Briefing called A History of Neglect: UK Export
Finance and Human Rights is one such report. Amnesty International reports:
Civil society organizations and parliamentarians have raised concerns over UKEFs lack of
transparency and disclosure for many years, but successive governments and UKEF itself
have consistently ignored them. As a result, a high level of mistrust and suspicion has
developed around UKEFs policies and practices. Obtaining information from UKEF is a
monumental task, and the agency shows no apparent willingness to change. This has
consequences for UKEFs image and its stakeholder relations, and also raises public
accountability issues.37
As noted, there have been many requests made to UKEF for transparency and they do
publish information about individual projects they are funding and the costs associated
with these projects. The projects are not organized or coded in a way to assess the total
amount of revenue or payments in the extractive industry.

Information is very difficult to access and requires a lot of time on their website trying to
find the relevant information and then looking for secondary sources that frequently
criticized UKEF for their lack of transparency. The researchers traced policies from UKEF to
OECD and ECG in order to find policies regarding environmental and social impact
assessments but information about revenue disclosure was not found.
3.2.2 Enforcement Mechanisms

No policies or procedures exist to be enforced. As noted in the quote above from the
Amnesty International Briefing, it is very difficult to access information from UKEF about
how they conduct their business.
3.2.3 Dodd-Frank, EU Directives, and IFC Sustainability Framework

Given that new US-EU mandatory disclosure rules through stock market regulations (e.g.,
Cardin-Lugar) will cover a larger number of companies, companies receiving funds and
insurance from UKEF will be forced to abide by these rules. This will likely indirectly affect
UKEF, however the department is largely accountable to the parliament and there have
been minimal changes made to UKEFs transparency procedures. In another report by
Corner House, they explained that
[] under recently introduced EU law, ECGD/UKEF, in common with other EU export credit
agencies, is now obliged to report to the European Commission every year on its compliance
with EU objectives and obligations.38
UKEF lacks clarity, transparency and accountability. As noted above there are critical
questions and problems with their policies and protocols, they state that they follow OECD
Common Approaches however evidence of this and required reports are not made public.
A History of Neglect UK Export Finance and Human Rights. Rep. Amnesty International, June 2013. Web.
<http://www.amnesty.org.uk/uploads/documents/doc_23288.pdf>.
38 Corner House Submission to APPG on International Corporate Responsibility: All Party Parliamentary Group on
International Corporate Responsibility Investigation into the Workings of UK Export Finance. Rep. Corner House,
22 June 2012. Web. 17 Nov. 2013.
37
16
UKEF is a member of OECD and as such they are also held to the standards of IFC
Performance Standards and the World Bank Safe Guard Policies. This means that there are
venues to hold UKEF accountable and to demand from them detailed reports and increased
transparency.
17
4 Compagnie Franaise d'Assurance pour le Commerce Extrieur39

Coface was founded in 1946 as a state institution. After being privatized in 1994, it is now
100% owned by the investment bank Natixis, a joint subsidiary of the French groups, Caisse
DEpargne and Banque Populaire. Coface helps companies protect, fund, control and
manage their commercial debt through the issuance of credit insurance, factoring, ratings,
business information, and debt management.
Coface has also managed guarantees on behalf of the French state, assisting French
companies by insuring risks that would be too risky to ensure otherwise.
We will examine Cofaces environmental and social commitment and the implications the
commitment has on the transparency of payment and contract disclosure for their public
guarantees. Information gathered from secondary sources such as Les Amis De La Terre,
Natixis, and ECA Watch will be discussed in a later section.
4.1 Background
Information regarding Coface was primarily obtained through online research and a
through examination of the Coface website. Coface has a complex web of country specific
websites, so Coface.fr was primarily used to find information on its public guarantees. The
French website was translated into English through Googles online translation tool. Coface
representatives were also contacted to gather additional information, and secondary
sources were collected and analyzed.
4.1.1 Scope and Size of the Problem

Since 2005, Coface has financed 17 projects in the extractive sector, financing over 1.1bn
($1.120bn) in total (see appendix A for a description of each project). We translated all
disclosed projects from the second quarter of 2005 to 2013, and then reviewed project
descriptions to identify extractive industry projects.
Coface does not adhere to, adopt or agree to any policy or frameworks that require the
recipients of Coface guarantees to disclose payment or contract information. To be specific,
their projects must comply with some international standards but no standards that would
require or suggest the firms which receive the guarantees must disclose payments or
contracts. Projects must comply with the IFC Performance Standards, but not the IFC Access
to Information Policy specifically.
The document Our Environmental and Social Commitment under the Environmental and
Social Evaluation section of the Coface website, Coface discloses their contract
requirements. This framework is in compliance with the OECD Recommendation on
Common Approaches, which is a development of common procedures and processes
relating to the environmental and social review of officially supported export credits.40
Coface reportage by Jamie LePinnet -jlepinnet@gmail.com- for The New School, Graduate Program in
International Affairs.
40 OECD Common Approaches Working Party on Export Credits and Credit Guarantees. June 28th 2012. Page 5
under section II General Principles (II.ii.3.ii)
39
18
According to the OECD Recommendation41, the relevant international standards are those
published by the World Bank Group (environmental and safeguard policies) and regional
development banks. More specifically the Coface environmental assessments are based on:
a. The World Bank's environmental and social safeguard policies
b. The IFC's Performance Standards
c. The IFC Environmental, Health and Safety Guidelines
4.1.2 Assessments from secondary sources

The Coface website is a rich source of information, from country rankings and risks to
economic studies. However, information on public guarantees, and payment and contract
transparency requirements for the recipients of their public guarantees are not included.
A report from 2009 by Les Amis De La Terre, 2001-2008: Who Benefits from Coface
Guarantees concluded that it was not possible to determine whether the environmental
procedures of Coface are applied correctly at that time.42 We have adopted some of their
recommendations in section 4 of this paper. In addition, we were able to review the issues
that Les Amis De La Terre identified in 2009, and compare them with Cofaces current
transparency initiatives.
Natixis, Cofaces parent company, reported that Coface had seven Oil and Gas Transactions 43
that underwent Environmental and Social due diligence in its 2012 Annual report. The
Coface website only lists three oil and gas projects however.
According to ECA Watch there is a lack of policy coherence and lack of transparency in the
peer review process. 44 According to ECA Watch, Coface partially financed the BTC pipeline
and the Jaitapur Nuclear Power Plant through dodgy deals.45
4.2 Transparency
4.2.1 Payment and Contract Disclosure
Coface complies with the OECD Common Approaches, which requires compliance with
three specific guidelines: the World Banks Environmental and Social Safeguard Policies; the
IFC Performance Standards; and the IFC Environmental, Health, and Safety Guidelines.
However, these guidelines do not require payment and contract disclosure, or any other
extractive industry disclosure requirements. In this section, we review Cofaces policy
frameworks and standards, and discuss the implications for transparency.
OECD Common Approaches. Page 9 Section 20.

<http://search.oecd.org/officialdocuments/displaydocumentpdf/?cote=TAD/ECG%282012%295&doclanguage
=en>
42 Les Amis De La Terre. 2001-2008: Who benefits from Coface guarantees,
<http://www.amisdelaterre.org/IMG/pdf/en_coface_report.pdf>
43 Natixis Annual Report. Page 48
<http://www.banktrack.org/download/2012_registration_document_and_annual_financial_report/natixis_2012
_registration_document.pdf>
44 ECA WATCH. <http://www.eca-watch.org/publications/eca/3150> Last accessed 12/8/13)
45 ECA WATCH. <http://www.eca-watch.org/ecas/coface> Last accessed 12/8/2013
41
19
In Cofaces Environmental and Social Commitment document, the general points listed are in
compliance with the OECD Common Approaches framework:
Coface carries out a systematic environmental assessment of all major credit-insurance
projects managed on behalf of French state when the French share is above 10 millions or
when located in or near a sensitive area. These projects must comply with the local
environmental laws, and the relevant international standards such as the World Bank Group
[standards].46
These international standards include:

The World Bank's environmental and social safeguard policies, 47 which provide
guidelines for bank and borrower staff in the identification, preparation, and
implementation of programs and projects.
The IFC's Performance Standards,48 which define private stakeholders roles and
responsibilities for managing their projects and the requirements for receiving and
retaining IFC support.
The IFC Environmental, Health and Safety Guidelines, 49which include technical
reference documents with general and industry-specific examples of Good
International Industry Practice (GIIP).
Cofaces environmental and social commitment is up to the standard of OECD Common
Approaches:50
Coface achieves its environmental and social analysis in accordance with the OECD
Recommendation on Common Approaches for export credits benefiting from public support
and have social and environmental due diligence. They are intended to ensure that projects
meet the relevant local regulations of the host country and relevant international standards,
primarily those developed by the World Bank and the IFC.51
The companies that receive their public guarantees are not required to disclose payments
or contracts made to governments because they do not have in place a framework requiring
this and/or do not adhere, adopt or agree to any frameworks that require this type of
disclosure. The World Banks Environmental and Social Safeguard Policies, the IFCs
Performance Standards and the IFC Environmental, Health and Safety Guidelines do not
require payment or contract disclosure, nor do they have any requirements in regards to
the extractive industry.
Our Environmental and Social Commitment; pdf download. Section General 1 OECD Framework
<http://www.coface.fr/Garanties-publiques/Evaluation-environnementale-et-sociale>
47 World Bank Environmental and Social Safeguard policies <http://go.worldbank.org/WTA1ODE7T0>
48 IFCs Performance Standards.
<http://www.ifc.org/wps/wcm/connect/115482804a0255db96fbffd1a5d13d27/PS_English_2012_FullDocument.pdf?MOD=AJPERES>
46
49 The IFC Environmental, Health and Safety Guidelines.

<http://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/IFC+Sustainability/Sustainability+Framework/Environmental,+Health,+and
+Safety+Guidelines/
http://www.coface.fr/Garanties-publiques/Evaluation-environnementale-et-sociale PDF of Common

Approaches available under Documents and listed as the second one (in english) <last accessed December 7th,
2013>
51 Public Guarantee section of the Coface.fr website: <http://www.coface.fr/Garanties-publiques/Evaluationenvironnementale-et-sociale>
50
20
4.2.2 Mechanisms of Compliance

In 2012, the denitive version of the Common Approaches was adopted by the OECD
Council52, which requires rigorous assessments of projects in environmentally sensitive
areas53 or projects over 10 million. The OECD is required to categorize these projects and
perform due diligence on projects in category A. During this process, Coface is required to
disclose an ex-ante54 30 days before the project is finalized and an ex-post disclosure.55
Coface makes significant contracts granted available publically. This information is
available online, from the second quarter of 2001-2013. The country where the loan project
takes place is listed, as well as the company that received the loan. Coface also discloses the
content of the loan project, as well as the amount.
However, this information does not amount to a disclosure of the payments or contracts of
private companies to governments.

As mentioned above, the Coface website does provide a list of guarantees from the second
quarter of 2001 until 2013. This information is located under the Environmental and Social
section of their website, and not under the Public Guarantees section. However, in general,
the website layout is counter-intuitive and extremely difficult to navigate. In addition, the
significant project listings are in PDF format, and exclusively in French.
Many links on the Coface.fr website are either broken or revert back to the original Coface.fr
home page. Cofaces website includes many broken links. Specifically, on the Our
Environmental and Social Commitment page, the links to the transparency guidelines are
broken (for example, the links to the IFC Performance Standards, the ex-ante transparency
page, and the ex-post disclosure page are all dead).
When I alerted Coface of these problems by email, they informed me that their website was
new, and the problems should be fixed now.
I tried to contact the Coface headquarters in France several times in order to obtain
additional information. However, the person who answered the phone was unable to
answer my questions, and was unwilling to connect me to anyone else in the organization.
Natixis 2012 Annual Report,

<http://www.banktrack.org/download/2012_registration_document_and_annual_financial_report/natixis_2012
_registration_document.pdf> Page 49.
53Glossary from Coface document Our Environmental and Social Commitment. Sensitive Area: In the
Environmental procedure drawn up by Coface, 9 types of area have been identified as sensitive. A project
located in or in the immediate vicinity of one of these areas will automatically be subject to an environmental
assessment, whatever the value of the contract. Furthermore, new sites located in or near to a sensitive area will
generally be classified under category A.
54Glossary from Coface document Our Environmental and Social Commitment. Ex- Ante Disclosure: The OECD
Recommendation requires ECAs to seek to make environmental information publicly available 30 calendar days
before a final commitment.
55 Glossary from Coface document Our Environmental and Social Commitment. Ex-Post Disclosure: It also
requires to publish information, including a description of the main environmental aspects, on the major
contracts secured by French companies that benefit from a Coface guarantee and that are related to category A
or B projects.
52
21
4.2.4 Comparison of Coverage

All Coface extractive industry-funding recipients were checked against the RWI Database
of Oil and Mining Companies Listed on Global Stock Exchanges. Of the 17 Coface-projects
that could be classified as extractive oil, gas or mining projects (2005-2013), none of those
projects are run by companies that are listed on a global exchange. Therefore, it appears
that the EU directives or section 1504 of Dodd-Frank would cover none of these companies.
4.3 Recommendations
In order to increase accountability and transparency for its extractive industry
guarantees:
Coface should adopt the entire IFC Sustainability Framework within their existing framework,
which would require Coface guarantee recipients to disclose payment and contract
information.
Coface should recognize a need for extractive industry transparency standards such as the
Extractive Industries Transparency Initiative (EITI), 56 and should require companies that
receive their public guarantees to implement EITI.
Coface should provide more information about the approval process for Coface guaranteed
projects. Currently, Coface reports that funding decisions are made by the Committee of
Guarantees and Export Credits. However, it would be helpful to know who is on this
committee. The group Les Amis De La Terre has also recommended Coface provide more
information on the Committee of Guarantees and Export Credits.
Coface should disclose all public guarantees that are approved. Currently they only release
projects that are valued at over 10 million and are considered to be in an environmentally
sensitive area. If Coface were to release all public guarantees, smaller project amounts
would be available for review, and this would increase its transparency.
It would not be difficult for Coface to make some of the above recommendations in the near
future. Last year, they adopted the newest version of the 2012 Common Approaches, which
has updated annexes about climate change. This indicates that Coface is willing to adopt
new frameworks to move closer to international standards. Compared to conclusions of the
Les Amis De La Terre report in 2009, Cofaces transparency has improved somewhat. In
addition, Coface has uploaded an official English version of their 2012 Activity report, and
fixed some functionality problems with its website as a result of complaints issued during
the course of the research for this report, which demonstrates at least a minimal
commitment to improvement.
56
Extractive Industry Transparency Initiative. EITI. <http://eiti.org/eiti>
22
5 United States Export Import Bank

5.1 Background
Ex-Im Bank is the official Export Credit Agency (ECA) of the United States (US). The Bank
provides working capital guarantees (pre-export financing); export credit insurance; and
loan guarantees and direct loans (buyer financing)57. It is the first official ECA to adopt a set
of Environmental and Social Due Diligence Procedures and Guidelines (Procedures and
Guidelines). This normative package establishes procedures to take into account the
potential beneficial and adverse environmental effects of goods and services for which
support is requested (Procedures and Guidelines, Introduction). In addition, Ex-Im Bank
operates in compliance with the OECD Common Approaches on the Environment
[Common Approaches]58, which is an environmental review framework that is shared by
all OECD ECAs.
5.1.1 Reforms made to the Banks Policies

The current norms of US Ex-Im Bank are the Environmental and Social Due Diligence
Procedures and Guidelines (Procedures and Guidelines), effective June 27 of 2013. This set of
norms went through a recent revision of bringing their current Procedures and Guidelines
into full compliance with the latest version of 2012s OECD Common Approaches for
Officially Supported Export Credits and Environmental and Social Due Diligence, as well as
with Equator Principles (those effective prior to June 2013), which Ex-Im Bank joined in
March 2011.
The former version of this normative package was the Environmental Procedures and
Guidelines59. A draft version with the proposed changes was made public during June of
201360. The changes included, among others, the [] incorporation of current Bank
practices, alignment with recent revisions to the IFC Performance Standards on
Environmental and Social Sustainability [IFC Performance Standards], and streamlining of
the EPG and its Annexes (2013: 1).
The updated version was renamed to Environmental and Social Due Diligence Procedures
and Guidelines. It included a variety of changes advocated by stakeholders, researchers and
experts. The Revenue Watch Institute (RWI) was one of this stakeholders that assessed the
Draft Revision of Ex-Im Bank Environmental Procedures & Guidelines of June 201361. One of
RIWs main comments was the lack of transparency requirements for the extractive sector.
The new version of the Procedures and Guidelines, effective since June 27 of 2013, modified
paragraph 14 of Section 1, echoing RWIs recommendations on contract and payment
transparency, becoming the only extractive sector specific rule in the current version of the
Banks Procedures and Guidelines:
http://www.exim.gov/generalbankpolicies/environment/ - Accessed 11/25/2013

Ibid.
59 http://www.exim.gov/generalbankpolicies/environment/environmental-procedures-and-guidelines.cfm Accessed on November 19, 2013
60 http://www.exim.gov/generalbankpolicies/environment/upload/Environmental-Proc-Guide-with-Intro2013-DRAFTrev1.pdf - Accessed 11/19/2013
61 Version provided by RWI as part of Resource Curse syllabus.
57
58
23
Projects that are in the extractive industries sector are encouraged to comply (on a
voluntary basis) with the disclosure activities described in Section V of the IFC Policy on
Environmental and Social Sustainability (Procedures and Guidelines).
RWI also made recommendations regarding reporting requirements. Particularly, asking for
the publication of the Banks monitoring reports in their website, and the lack of precision
about how their Procedures and Guidelines meet requirements from the Equator Principles.
The degree to which these recommendations were taking into account in the updated 2013
version of the Banks Procedures and Guidelines is examined in the sections that follow.
5.1.2 Financing in the Extractive Sector: Capital & Companies

Ex-Im Bank supported 27 companies of the extractive-sector during their 2002-2012 fiscal
period. This support represented 9% of the total portfolio of Ex-Im Bank, and corresponded
to USD$17,724 Millions in loans and guarantees. Such capital does not represent the total
amount of company revenue or the payments made to host governments by the extractive
industry. However, it does provide a sense of the sort of investments and activity deployed
abroad by extractive sector companies that were supported by Ex-Im Banks extractive
portfolio. Estimating the coverage of transparency policies, such as Dodd-Frank and EUDirectives, based on the 2002-2012 period, allows us to examine the potential scope of
these said policies when regulating the companies of the extractive sector. In this section
the extractive portfolio is examined and the scope of the transparency requirements of
international financial reforms is estimated based on the US Ex-Im Banks 2002-2012 fiscal
years62.
5.1.2.1
Estimating the scope of transparency requirements of international financial

reforms: Dodd-Frank and EU-Directives
The potential coverage that Dodd-Frank and EU-Directives could have on the extractive
sector companies supported by Ex-Im Bank might be of limited scope; such conclusion can
be drawn not only in terms of companies, but also in terms of capital and projects.
Out of 27 extractive sector companies supported by EX-Im Bank during the 2002-2012
fiscal years, transparency policies, if adopted, could potentially cover 13 (48.1%) companies.
While Dodd-Frank could potentially cover eight (8) companies, EU-Directives might cover a
total of ten (10): together covering a total of 13 companies, out of which five (5) companies
could potentially be shared by both policies (see Annex 6.5.3.1 - Estimation of coverage of
Intl. Transparency Reforms, by amount of companies).
This information was compiled from the Banks annual reports, available at:
http://www.exim.gov/about/library/reports/annualreports/ - Accessed November 20th of 2013.
62
24
ExIm Bank
30
20
ExIm Bank
10
Dodd-Frank
EU-Direct.
EU-Direct.
Dodd-Frank
Graph 2: Coverage of Intl. Transparency Reforms within Ex-Im Banks 2002-2012extractive portfolio, by
amount of companies Source: table base don own estimation from US ExIm Banks Annual Reports
of FY 2002-2013
The landscape is similar in terms of projects and capital. These companies, which could
potentially be covered by the Transparency policies, only deployed 35.1% (22) of the total
amount of projects (77) supported by the Bank during the 2002-2012 fiscal years (see
Annex 6.5.3.3 - Estimation of coverage of Intl. Transparency Reforms, by amount of projects).
In terms of capital, Dodd-Frank and EU-Directives could potentially cover an aggregated
value of 6.8 Billion (38.6%) of Ex-Im Banks total extractive portfolio. Each policy could
potentially target an estimate of 5.8 and 5.6 billion, respectively; while 4.6 Billion could be
covered simultaneously by both policies (See Annex 6.5.3.2 - Estimation of coverage of Intl.
Transparency Reforms, by amount of capital). Graph 3, for example, shows that 48.1% of the
companies, which Dodd-Frank and EU-Directives could potentially be covering, represents
38.7% of the total amount of capital supported through the Banks extractive portfolio.
ExIm Bank
$20,000
$15,000
$10,000
ExIm Bank
$5,000
Dodd-Frank
$0
EU-Direct.
EU-Direct.
Dodd-Frank
amount of capital (In Millions) Source: table base don own estimation from US ExIm Banks Annual
Reports of FY 2002-2013
25
5.1.2.2 State-owned companies: key players

The limited scope of the potential coverage of transparency policies, which is mentioned
above, could be better understood if the type of companies supported by Ex-Im Bank is
examined. First, while the higher coverage of EU-Directives vs. Dodd-Frank could be,
perhaps, explained by the additionality of EU-Directives, mirroring Dodd-Frank
requirements to those of EU-Directives would still have a limited scope due to the amount
of state-owned companies supported and the capital their projects represent. Half of the 14
companies not covered either by Dodd-Frank or EU-Directives are state-owned companies
(7), whose projects represent 96% of the capital not-covered by transparency policies, and
59.3% of the total extractive portfolio (See Annex 6.5.3.4 - Estimation of coverage of Intl.
Transparency Reforms, by state-owned companies). That is, as Graph 4 shows, state-owned
companies constitute an important type of company that is outside the scope of US and EU
extractive sector-specific transparency financial reforms. In the case of the Ex-Im Bank, for
instance, only one (1) state-owned company Mexicos PEMEX- is the Obligor of 89% of the
capital that potentially might not be covered by international transparency requirements,
which also corresponds to 54% of US Ex-Im Banks total extractive portfolio (See Annex
6.5.2 - Extractive projects supported by US Ex-Im Bank).
ExIm Bank
$20,000
$15,000
$10,000
ExIm Bank
$5,000
Not covered
$-
State-owned
State-owned
Not covered
Graph 4: Amount of capital invested by state-owned companies and supported by Ex-Im Banks 20022012 extractive portfolio (In Millions) Source: table base don own estimation from US ExIm Banks
Annual Reports of FY 2002-2013
Due to the limited scope of transparency requirements of international financial reforms, it

becomes crucial to examine the US Ex-Im Banks Policies in light of extractive sector-specific
transparency requirements. The estimation in the previous sections implies that more than
50% of the companies supported by the Bank dont have to comply with contract and
payment transparency, even if Dodd-Frank and EU-Directives are fully adopted.
Additionally, it also becomes critically important that natural resource rich countries
comply with EITI requirements, in order to counterbalance the limited scope of
international financial reforms. Following is a detailed examination of US Ex-Im Banks
Policies, and the location of transparency requirements, within the Banks policies, that
cover extractive sector projects.
26
5.2 Transparency Policies specific to the Extractive Industries

The first chapter of this section provides an overview of the norms and rules found in the
Banks Procedures and Guidelines that apply to extractive sector projects. Since extractive
sector policies are scant, its purpose is to locate extractive projects within the normative
universe of US Ex-Im Bank, which applies to all sectors. The second subsection deals
directly with the only extractive sector specific transparency policy of US Ex-Im Bank, which
is Paragraph 14 of Section 1. The third chapter follows with an overview of the enforcement
mechanisms dictated by the Banks policies that apply to extractive projects, in terms of
both its overall policies and those specific to payment and contract transparency. Finally,
the section will end with a chapter dedicated to examine how easy is for the user to access
the information disclosed.
5.2.1 The Extractive sector within Ex-Im Banks Policies

The current Procedures and Guidelines of US Ex-Im Bank is the overarching set of norms that
applies to projects across all sectors. These are strongly based on rules from the OECD and
the World Bank Groups. The OECD Common Approaches and the Performance Standards of
the IFC constitute the main set of rules by which Ex-Im Bank frames its policies. OECD
Common Approaches constitutes the backbone of Ex-Ims Procedures and Guidelines. These
are supplemented by additional rules established by the World Bank Group -IFC
Framework, in particular- which are referenced with different degrees of adoption: the
IFCs Performance Standards and the EHS Guidelines are required for all projects across all
sectors; Safe Guard Policies are encouraged under borrowers preference; and, the IFCs
Sustainability Policy is only partly encouraged for extractive projects. There is no reference
to IFCs Policy on Disclosure of Information. What follows is a more detailed description of
how extractive projects are covered within this normative universe set by Ex-Im Banks
Procedures and Guidelines.
Although there are no extractive industry specific policies, the policies that apply to
Extractive Projects can be located within Ex Im Banks Procedure and Guidelines. All
projects are classified according to the environmental classification of OECD Common
Approaches. For our interest, extractive projects are covered by the rules that fall under the
Category A; that is, those that have the higher degree of adverse environmental and/or
social impacts63:
Operations that involve large scale extraction, via underground or open-pit mining, solution
mining, or marine or riverine operations to obtain precious metals, base metals, energy and
industrial minerals, or construction materials. It may also include the processing of the
extracted material (Procedures and Guidelines, Annex D: Paragraph 16)
[]
Large scale oil, gas, or liquefied natural gas development that may include any or all of:
exploration (seismic and drilling);
field development and production activities;
transport activities, including pipelines/terminals, pump stations, pigging stations,
compressor stations and associated facilities; or
gas liquefaction facilities (Procedures and Guidelines, Annex D: Paragraph 18)
[]
The illustrative list of Category A projects (e.i., Annex D of the Procedure and Guidelines) is the same as that of
the OECD Common Approaches.
63
27
Installations for storage of petroleum, petrochemical, or chemical products with a capacity

of 200,000 tonnes or more (Procedures and Guidelines, Annex D: Paragraph 19).
Under Category A, an extractive project must follow the IFC Performance Standards and the
EHS Guidelines of the World Bank Group:
Consistent with the Common Approaches, new projects and projects undergoing significant
change in output or function will be evaluated against host-country environmental
guidelines and international environmental guidelines. The international guidelines
generally applicable will be those of the World Bank Group (collectively, the World Bank
Group Guidelines) as set forth in the 2012 eight IFC Performance Standards on Social &
Environmental Sustainability (Performance Standards) and the Environmental Health and
Safety Guidelines of the World Bank Group as set forth in Annex A of this document
(Paragraph 11 Section 1, Procedures and Guidelines)
These requirements set by IFC Performance Standards and the EHS Guidelines cover both
private and public transactions. For our interest, extractive projects fall under those policies
that are specific to private sector projects. In the Ex-Ims Procedures and Guidelines, these
projects must follow:
[] the International Finance Corporations (IFC) Performance Standards on Social &
Environmental Sustainability (IFC Performance Standards), effective January 1, 2012, and
the Environmental Health and Safety (EHS) Guidelines of the World Bank Group. (Section 1,
Annex A-1, Procedures and Guidelines).
IFC Performance Standards and EHS Guidelines are pertinent to Extractive Projects, even
when dealing with projects co-financed with any MDB:
For those projects in which the European Bank for Reconstruction and Development
(EBRD), the African Development Bank, the Asian Development Bank or the Inter-American
Development Bank are involved, Ex-Im Bank may apply the guidelines, in whole or in part, of
the respective Multilateral Development Bank (MDB) to the project. In the case of conflict
between the MDB guidelines or gaps in the MDB requirements with applicable IFC
Performance Standards and EHS Guidelines of the World Bank Group, the more stringent
guidelines will apply as determined by Ex-Im Banks E&E Division (Section 1, Annex A-1,
Procedures and Guidelines).
Graph 5 summarizes the location of Extractive Sector Projects within Ex-Im Banks
Procedures and Guidelines. The rules that cover directly extractive projects are located
within Annex A. These rules deal with, first, matters of classification according to
environmental and social impact OECD Common Approaches Category A-, and to the type
of transaction involved; and, second, with the requirements set up by WB standards: IFC
Performance Standards and EHS Guidelines. Transparency-related policies are not located
in Annex A, but in the main body of the document. However, these are not required, but
encourage.
28
Graph 5: Location of Extractive Projects within US ExIm Banks Policies. Source: Own visualization based on
Procedure and Guidelines of US Ex-Im Bank.
In addition to the above, extractive projects also fall under Equator Principles requirements
as of 2011, which are embedded throughout the Banks Procedures and Guidelines; in other
words, according to the Bank, the Procedures and Guidelines are the mechanism by which
the Bank complies with Equator Principles:
Ex-Im Bank implements the Equator Principles through the Bank's Environmental and
Social Due Diligence Procedures and Guidelines (ESPG) covering the processes for screening,
categorization, guidelines, and environmental and social impacts review of all Ex-Im Bank
transactions, including project financings 64.
In terms of scope, only two extractive projects that were financed during 2012 by the Bank
(see Annex 1 of this document) were categorized as complying with Equator Principles65.
In all cases, projects must meet relevant environmental standards of the host country:
http://www.exim.gov/generalbankpolicies/environment/
Broadly, Equator Principles apply to projects whose capital costs are greater than USD$ 10 million, or that are
two year long projects that have plans to further their capital costs to this said amount or over (Equator
Principles, 2013: 2). For more information, see Scope section of the Equator Principles document:
http://www.equator-principles.com/resources/equator_principles_III.pdf
64
65
29
Projects should, in all cases, comply with the relevant environmental standards of the host
country. Where the applicable World Bank Group Guidelines (or other applicable
international environmental guidelines) against which the project has been evaluated are
more stringent as determined by the E&E Division, the project is expected to meet the more
stringent guidelines (Paragraph 20).
This is of particular importance for projects being deployed in EITI compliant countries,
since EITI requirements regarding contract and payments transparency could be
understood as the stringiest guidelines.
5.2.2 Transparency Policies and Extractive Projects

The US Ex-Im Bank references in its Procedures and Guidelines transparency requirements
from two of IFCs policies: the Performance Standards and the Sustainability Policy. More
precisely, these are the Environmental and Social Impact Assessments (ESIA), and Section V
of the IFC Sustainability Policy, respectively. Although ESIA reports is not extractive-sector
specific, it does apply to extractive projects since they fall under Category A (and B, if
applicable). On the other hand, Section V of the IFC Sustainability is the only extractive
sector specific policy of the Banks Procedures and Guidelines. Following is a brief
description of the two.
ESIA is a reporting mechanism that has the potential to provide information about design,
expected impacts and operational aspects of an extractive project that is defined as
Category A. It includes a project description, baseline data and the projected social and
environmental impacts both positive and negative-, other possible alternatives to project
design and operation, and various aspects regarding implementation management. Under
the Banks Policies,
All projects classified as Category A require the preparation and submission to Ex-Im Bank
of a complete Environmental and Social Impact Assessment (ESIA) consistent with the
information requirements set forth in the eight IFC Performance Standards on
Environmental and Social Sustainability as revised in January 2012 and as described in
Annex E (Procedures and Guidelines, Annex A-1, Section 3).
However, a series of discrepancies arise when examining the sort of information that should
be included in ESIA reports. The requirements for ESIA reports published in Annex E of the
ExIm Bank Procedures and Guidelines are not based on the 2012 revised version of IFCs
Performance Standards, as described in the above paragraph; rather, they are based on
Annex II of 2012 OECD Common Approaches. This implies that these requirements are not
up-to-date with current IFC Performance Standards, for the following reasons. Within
Common Approaches, the requirements of the structure of ESIA reports are based on the
IFC Guidance Notes: Performance Standards on Social and Environmental Sustainability of
31 July 2007 [] (OECD Common Approaches, 2012: Annex II, Footnote 1), and not IFC
Guidance Notes revised version of 2012. This discrepancy adds variation to the sort of
information that an ESIA report is expected to provide.
The above discrepancy can be illustrated with the following two examples. First, IFC
Guidance Notes of 2007 differs from the 2012-updated version in the requirements that
make up an ESIA report. While in 2007 the requirements were:
30
(i) Social and Environmental Assessment; (ii) management program; (iii) organizational
capacity; (iv) training; (v) community engagement; (vi) monitoring; and (vii) reporting (IFC
Guidance Notes, 2007: Paragraph 3)
in the 2012 version of the IFC Guidance Notes it reads the following:
i) policy; (ii) identification of risks and impacts; (iii) management programs; (iv)
organizational capacity and competency; (v) emergency preparedness and response; (vi)
stakeholder engagement; and (vii) monitoring and review (IFC Guidance Notes, 2012:
Paragraph 5)
In addition to this lack of up-to-date requirements with international standards, the Banks
Procedures and Guidelines introduces in their website a copy of the [] text that has been
adapted [by OECD 2012 Common Approaches] [] for the purposes of this
Recommendation (Procedures and Guidelines, 2013: Footnote 1, Annex E). When
comparing this requirement to IFC Guidance Notes of 2012, the result is more variation and
nuances to the information that is expected to be included as part of an ESIA report. Both
examples are related to the Banks reliance in OECD Common Approaches as the main
source of reference to comply with international standards; in other words, since OECD
Common Approaches are not up-do-date with IFCs Guidance Notes, so will be the US Ex-Im
Bank Procedures and Guidelines.
The second transparency policy of the IFC Framework that is referenced in the Banks
Procedures and Guidelines is Section V of the IFC Sustainability Policy66. This is the only
extractive sector-specific norm within the Banks policies. However, it is not a nonvoluntary requirement; rather, extractive projects are only encouraged to comply:
Projects that are in the extractive industries sector are encouraged to comply (on a
voluntary basis) with the disclosure activities described in Section V of the IFC Policy on
Environmental and Social Sustainability (Section 1, Paragraph 14).
Section V of the IFC Sustainability Policy is the only rule that, being based on IFCs
Framework, deals directly with extractive sector-specific disclosure of payments and
contracts with host governments. Since IFC Performance Standards, EHS Guidelines, and
Safeguard Policies have not introduced a disclosure component related to non-voluntary
payment and contract transparency, this is the only extractive-sector specific policy of ExIm Banks Procedures and Guidelines. There is no reference to the Information Disclosure
component. Hence, Ex-Im Banks disclosure policy on payment and contract transparency
for companies deploying extractive projects is voluntary. The following graph summarizes
this appreciation:
66
In this case, it is the updated and revised version of IFC Sustainability Policy of 2012.
31
Graph 2 Overlaps in contract and payment transparency requirements between US Ex-Im Banks Policies and IFC
Sustainability Framework. Source: Own visualization based on Procedure and Guidelines of US Ex-Im Bank.
5.2.3 Mechanisms of compliance

Ex-Im Banks mechanisms of compliance to its Procedures and Guidelines start with the
agreements that are included in the financial documents of the projects:
Appropriate environmental and social covenants are included in the financing documents to
ensure compliance with the Equator Principles and Ex-Im Bank's own environmental
standards, with project monitoring by Ex-Im Bank's Engineering & Environment and
Portfolio Management Divisions (Ex-Im Banks website, 2013)
These are coupled with three types of monitoring mechanisms:

[] financing conditions pertaining the implementation of measures to mitigate a [Category
A] projects risks and impacts [] [are] [] conducted through the review of information
provided by [1] the sponsor, [2] independent consultants [] and [3] through site visits
(Section V Project Monitoring, Procedures and Guidelines).
In all cases, these said monitoring reports must provide

[] information as to the projects level of compliance with applicable environmental
standards and guidelines, and the provisions of any environmental conditions related to ExIm Bank's financial support for the project (Section V, Procedures and Guidelines)
These current compliance mechanisms do not provide the sort of specificity that is
demanded by the transparency requirements of Section V of IFC Sustainability Policy; that is,
payment and contract transparency. In other words, there isnt a specific mechanism to
32
enforce compliance with contract and payment transparency requirements in the Banks
Procedures and Guidelines. It is not clear whether, if a borrower decides to voluntarily
comply with this said Section, the Banks overall mechanisms would be used for an
extractive project, or if more specific mechanisms would be necessary.
Since payment and contract transparency have not been part the Banks policies which
means that, perhaps, the Bank has yet to develop the capacity for such type of enforcement-,
an independent consultant would be the most probable mechanism used to verify
compliance with Section V of IFC Sustainability Policy67. This said mechanism is an
alternative to the reviewing of information provided by the sponsor and the site visits
performed by US Ex-Im Bank. Such alternative is chosen depending on the following:
In the case of limited recourse project financing involving Category A [] projects, Ex-Im
Bank will require that the project sponsor(s) bear the expense associated with retaining an
independent environmental and social consultant satisfactory to Ex-Im Bank to conduct site
visits on behalf of Ex-Im Bank, to obtain the information required to monitor the projects
environmental performance and level of compliance, and produce monitoring reports to
supplement the periodic monitoring reports that the Sponsors are required to submit to ExIm Bank through the term of Ex-Im Banks financing. Alternatively, this monitoring
requirement may be met if the sponsor retains qualified and experienced external experts
satisfactory to Ex-Im Bank to verify the periodic monitoring information that it submits to
Ex-Im Bank (Procedures and Guidelines, Section V: italics added by author).
Finally, as RWI assessment68 of the Draft Revision of Ex-Im Bank Environmental Procedures &
Guidelines points out, the public disclosure of ESIA reports is hindered by the following
requirement of the Banks Procedures and Guidelines of 2013:
Prior to the release of an ESIA, Ex-Im Bank will require that the Project Sponsor formally
agree to make the ESIA available for public disclosure in a form that does not contain
proprietary business or commercial information (Procedures and Guidelines, Footnote 4).
This requirement of a previous agreement for the disclosure of the ESIA report still is a
problematic ambiguity that opens the doors for the Project Sponsor to circumvent the
requirement by not consenting to such reporting (RWI, 2013). Despite the
recommendations of RWI, this requirement was not updated or modified. It is important to
note that such requirement has been part of the Banks Policies since its former version
Environmental Procedures and Guidelines69 (in this case, see Footnote 5).

The information disclosed from extractive projects, which voluntarily follow Section V of
the IFC Sustainability Policy, is not available -yet. Since voluntary compliance was
introduced in the Banks Procedures and Guidelines to be effective as of June 27 of 2013, the
first reports from those extractive projects that voluntarily comply with the said
The implications of using this mechanism for contract and payment transparency are discussed in the 3.1
Gaps and Weaknesses chapter.
68 Revenue Watch Institute comments on Export-Import Bank of the United States Environmental
Procedures and Guidelines released Wednesday 15 May 2013, document provided by RWI.
69 http://www.exim.gov/generalbankpolicies/environment/environmental-procedures-and-guidelines.cfm Accessed on November 19, 2013
67
33
requirements, during the remaining months of 2013, would be made available to the public
in 2014:
Consistent with the OECD Common Approaches, Ex-Im Bank will make available to the
public a list of those transactions that were approved during the past calendar year for
which it conducted an environmental review (Paragraph 20, Section 1).
For the above reason, this document examines the Banks current channels to make projectrelated information publicly available. As contract and payment transparency is voluntary,
it is through these channels that the compliance with Section V of IFC Sustainability Policy
would be made public. The current channels were identified based on those relevant to
Category A of the OECD Common Approaches, which, as it has been shown in previous
sections of this document, is where extractive projects are classified.
The channels through which information of Category A projects is made public are two: i)
brief project information in the website Approved and Pending Transactions List, available
through the Banks web site70, and ii) the ESIA reports.
These channels show serious limitations for deploying any sort of effective transparency
policy. First, both of these channels do not offer a possibility to know whether or not the
project voluntarily complied with Section V of the IFC Sustainability Policy. In the case of the
Approved Transaction List, only project information regarding the geographical location
and a brief description of the project. Second, the information published Approved and
Pending Transactions List is vague and imprecise. Only major projects classified as
Category A are published, and the year in which the project was approved is not mentioned;
this limits any sort of estimation of the amount of projects financed by the Bank for any
given period of time.
Finally, the second device that is crucial to the Banks reporting mechanisms is the ESIA
report. The Bank has two ways to make public this said report:
[Ex-Im Bank] will post a hyperlink (if and when available) to the ESIA [report] on Ex-Ims
Pending and Approved Transactions List webpage. In addition, Ex-Im Bank will make a
copy of the ESIA available to interested parties upon request (Section 1, Paragraph 9b).
Regarding the hyperlinks, only 2 projects have a hyperlink that provides a summary of the
ESIA report (see Annex 2), out of 37 projects listed under the Approved section. There is
no information regarding the availability of ESIA reports for the remaining projects. This is
only available if a written request is sent to a physical address.
Apparently, as RWIs assessment points out, the requirement of a previous agreement for
the disclosure of the ESIA report (See Procedures and Guidelines, Footnote 4) has hindered
the public access to the information, voluntarily disclosed, about payment and contracts of
extractive projects.
34
5.3 Gaps, weaknesses, and recommendations

The following section examines the gaps and weaknesses of US Ex-Im Banks policies
according to: i) contract and payment transparency, ii) compliance with outside standards
and guidelines, iii) monitoring and enforcing mechanisms, and iv) accessibility of
information. Each gap is coupled with a recommendation (if it applies).
5.3.1 Contract and Payment transparency

Gap and Recommendation: Paragraph 14 of the Procedures and Guidelines should require
compliance with Section V of the IFC Sustainability Policy, not only encourage it.
5.3.2 Compliance with external standards and guidelines

1. Gap: Compliance with the Equator Principles are embedded within the requirements of
the Banks Procedure and Guidelines. However, for RWI it is still unclear how does the Bank
resolve gaps between the EPG and Equator Principle Guidelines.
Recommendation: A much more deeper assessment of the Banks updated policies of 2013
and the Equator Principles III71 (effective June 4 2013) should be advanced.
2. Gap: A series of implications arise from the way in which OECD Common Approaches
constitutes the backbone of the Banks Procedures and Guidelines. Since the Common
Approaches are not up-do-date with IFCs Guidance Notes, so will be Procedures and
Guidelines. This dependence could generate noise between the Bank furthering its
requirements, the project sponsor elaborating the ESIA report, and stakeholders furthering
accountability, due to the gaps between the up-to-date IFCs Guidance Notes and that which
is referenced in the Banks Policies.
Recommendation: The Bank should require compliance with the most updated version of
any standard it mentions.
5.3.3 Monitoring and enforcing mechanisms

1. Gap: The requirement of a previous agreement with the Project Sponsor for the
disclosure of the ESIA report which is part of the IFC Sustainability Framework- still is a
problematic ambiguity that opens the doors for the Project Sponsor to circumvent the
requirement by not consenting to such reporting, as noted by RWI.
2. Gap: One of the major loopholes of the Banks Policies is within their monitoring
mechanisms; particularly, the implications that the Project Sponsor bares the responsibility
to retain independent consultants to verify the Projects adherence to Ex-Im Banks
requirements (see section 2.3 of this document). As Equator Principles are embedded
within the Banks Procedures and Guidelines, a major loophole is the lack of mechanisms for
determining if the borrowers and banks are adhering to the EP standards (an argument
furthered by Lawson-Remer, 2012). Similarly, there is no mechanism that ensures that an
independent consultant will require the companies, which voluntarily complied with
payment and contract transparency, to adhere to Section V of the IFC Sustainability Policy.
Recommendations: More independence and autonomy needs to be guaranteed for these
independent consultants and experts that determine adherence to standards. The Bank
71
http://www.equator-principles.com/index.php/ep3
35
should also support initiatives that increase civil societys capacity to assess a projects
environmental and social impact and consider this as supplemental information in
evaluating a Projects compliance with requirements and guidelines.

1. Gaps: the channels through which information of Category A projects are made public do
not offer the possibility to know whether or not the project is voluntarily complying with
contract and payment transparency. In other words, the Bank is yet to embed within its
communication infrastructure a mechanism that allows the public user to know whether
Category A projects have voluntarily complied or nor with contract and payment
transparency.
2. Gap and recommendation: The information published in Approved and pending
transaction list is vague and imprecise. It needs to be improved in order to guarantee an
effective transparency policy.
36
6 Annexes
6.1 Export-Import Bank of China
Power Map
Subordinate to State Council , the chief administrative authority of the PRC
Chairman and President: Li Ruogu Vice President: Zhu Hongjie

Vice President: Liu Liange
Vice President: Zhu Xinqiang
Secretary of the Discipline Inspection Committee: Gong Jie
Vice President: Sun Ping
Member of the Board: Zhang Songta
6.2 Korea Export Import Bank

Advocacy Recommendations
The Korea Export-Import Bank is not a good target for RWI to pursue as they invest a
relatively small amount in the extractive sector. Their mission is also wholly nationalistic
in nature, accountable only to the government of Korea, and unlikely to yield to pressure
when transparency is not in their interests.
6.3 Compagnie Franaise d'Assurance pour le Commerce Extrieur

Power Map
Coface reports that the "Committee on guarantees and export credit" decides which
guarantees are made on the French governments behalf. According to Friends of the Earth
(Les Amis De La Terre), the names of the members of the Committee on Guarantees and
Export Credit are not published or disclosed.
Group Management Board: The Group Management Board, chaired by the CEO, is
responsible for group strategic and organizational matters.
Our Environmental and Social Commitment lists Stephanie Dengis-Vandermeulen as a
contact. Attempts to contact Stephanie at the provided number (33+0+ 1 49 02 14 50) and
37
email address (garantiespubliques_environnement@coface.com) over the course of the

research for this report resulted in no responses.
Contact was made with an employee on the main phone number listed on the website, but
they did not provide any useful information to public guarantees or Coface in general. The
basic contact form on the Coface website yielded no responses either. Myrian Crosnier
<myriam.crosnier@coface.com> provided the author with a general link to the Coface
websites export credit insurance section72, and stated that the 2012 Annual report would
be available in English in the following days (October 21st, 2013), and that the French
version was available on the Coface website. No Annual Report was published however,
only an Activity Report with very limited information, and no information in regards to
public guarantee disclosure.
Les Amis De La Terre Contact Information: Listed on the report as a contact is Juliette
Renaud of the Financial Actors Accountability Campaign, reached at +33 (0) 1 48 51 18 92
or at juliette.renaud@amisdelaterre.org.
6.4 United Kingdom Export Finance Department

6.4.1 Advocacy Recommendations
UKEF is an optimal advocacy target for RWI for three reasons: it has minimal
transparency policies and practices; it is contributing significant amounts of money to
fund extractive industry projects; and there are opportunities to build coalitions with
other likeminded and reputable organizations that are also advocating to change UKEFs
transparency practices.
As discussed previously UKEF has no policy of transparency and releases minimal
amounts of data about their work with limited data available on their website. UKEF lags
far behind other export credit agencies and development banks in transparency
initiatives and does not adhere to industry standards of EITI, IFC or the new EU
disclosure program.
Changing these policies is significant because of the large budget UKEF has and is
investing into extractive industry projects. It was unclear how total spending goes to
extractive industry because projects are not coded in a clear way to find an aggregate
budget. In spite of this lack of data, we can surmise that the budget is significant given
that the total budget of UKEF from 2012-2013 was 4.3 billion, an increase from 20112012 when the budget was 2.3 billion.73 Additionally, sample projects of extractive
industries that the UKEF is funding further demonstrate that the department is working
with large sums of money and should be held accountable to industry standards.
Finally there are opportunities for RWI to help build and join coalitions of other
organizations reporting on UKEFs lack of transparency and doing advocacy work on
72http://www.coface.fr/Garanties-publiques/Securiser-la-realisation-et-le-paiement-du-contrat-
export/Assurance-credit-export#document
38
these issues. Amnesty International released a report in June 2013 criticizing UKEF for
their lack of transparency and human rights abuses. They noted in their report that
other organizations are also calling for changes to UKEF policy and practice in addition
to parliamentarians in the UK that are calling the departments practices into question.
RWI could align and partner with Amnesty International on their UKEF work and learn
more about the developing coalition and entry points in parliament to push UKEF.
6.4.2 Annex - UKEF Extractive Industry Projects Funded from 2010-2013

In 2010-2011 the projects in the extractive industry included74:
Nigeria
Company: Well Trade Services Ltd
Buyer: WTS Broadcasts Ltd
Project: Outside broadcast trucks
Cost: 5,225,000
Russia
Company: Rolls-Royce Power Engg Ltd
Buyer: Gazprom
Project: Steam compressor station
Cost: 330,255,780
Saudi Arabia
Company: Fluor Ltd and other UK exporters
Buyer: Saudi Kayan Petrochemical Company
Project: Kayan petrochemical complex
Cost: 62,434,280
Slovakia
Company: Rolls-Royce Power Engg Ltd
Buyer: PPC Energy
Project: Gas turbine
Cost: 15,285,959
South Africa
Company: BNP Paribas
Buyer: N/A
Project: Loan to Mozal Aluminium Smelter
Cost: 6,567,953
Company: Deutsche Bank AG
Buyer: N/A
Project: Loan to Mozal Aluminium Smelter3
Cost: 7,820,247
UK Export Finance- Export Credit Guarantee Department: Annual Report and Accounts 2011-2012. Rep. UK
Government, 19 June 2012. Web. 17 Nov. 2013.
<https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/222383/uk-exportfinance-annual-report-and-accounts-2011-12.pdf>.
74
39
In 2011- 2012 the projects in the extractive industry included75:

Brazil
Company: Unknown
Buyer: Petrobras
Project: Petrobras oil and gas exploration and production facilities in the South Atlantic
Cost: 920,720,8943
Company: Siemens VAI Metals Technologies Ltd
Buyer: Gerdau Aominas S.A.
Project: New combined plate and Steckel mill
Cost: 216,184,768
Italy
Company: Clyde Union Holdings Ltd
Buyer: Saipem Energy Services SpA
Project: Spare parts for pumps
Cost: 54,519
Nigeria
Company: Gentec Energy Ltd
Buyer: Green Fuels Ltd
Project: Compressed natural gas delivery system
Cost: 6,002,010
Philippines
Company: ABN Amro Bank
Buyer: N/A
Project: Loan to Gas Power Project4
Cost: 21,377,671
Qatar
Company: WRG Creative Communication Ltd
Buyer: Qatar Petroleum
Project: Social events ceremony
Cost: 791,005
Russia
Company: Joy Mining Ltd
Buyer: Siberian Coal Energy Co
Project: Mining equipment
Cost: 4,808,863
<https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/222383/uk-exportfinance-annual-report-and-accounts-2011-12.pdf>.
75
40
Buyer: Southern Kuzbass Coal Co OAO

Cost: 8,742,166
Saudi Arabia
Company: Fluor Ltd
Buyer: Saudi Kayan Petrochemical Co
Project: Kayan petrochemical complex
Cost: 65,674,438
South Africa
Buyer: N/A
Project: Loan to Mozal Aluminium Smelter4
Cost: 4,791,957
In 2012- 2013 the projects in the extractive industry included76:
Abu Dhabi
Company: Altek Europe Ltd
Buyer: Emirates Aluminium Co
Project: Dross presses
Cost: 28,588
Bangladesh
Company: See note
Buyer: See note
Project: Design of a refuel rig
Cost: 182,875
(Note: Details not disclosed e.g. for reasons of commercial confidentiality)
Brazil
Company: Dolphin Drilling Ltd
Buyer: Petrobras
Project: Oil and gas exploration
Cost: 147,363,250
Germany
Company: Viper Subsea LLP
Buyer: Cameron GmbH
Project: Oil & gas distribution connection plates
Cost: 95,758
Philippines
Company: ABN Amro Bank
<https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/207721/ecgd-ukef-annualreport-and-accounts-2012-to-2013.pdf>.
76
41
Buyer: N/A
Project: Gas Power Project
Cost: 15,017,473
Russia
Buyer: Siberian Coal & Energy Co
Cost: 53,627,280
Saudi Arabia
Company: KW Designed Solutions Ltd
Buyer: Saudi Archirondon Ltd
Project: Pressure test vessel
Cost: 61,160
Sierra Leone
Company: Dawnus Sierra Leone Ltd
Buyer: London Mining Co Ltd
Project: Iron ore mine
Cost: 4,614,959
South Africa
Buyer: N/A
Project: Mozal Aluminium Smelter
Cost: 2,390,684
6.5 United States Export Import Bank

6.5.1 Projects complying with Equator Principles
January 1 to December 31, 2012 Data -- Project Finance Transaction Screenings:
Category A 5
Category B 8
Category C 7
Total
20
Table 1 Source: US Ex-Im Bank: Project Finance Transaction Screenings, January 1 to December 31, 2012 Data
- http://www.exim.gov/generalbankpolicies/environment/
Sector
Category A Category B Category C All
Mining
Chemicals & Refining 2
Oil & Gas
Power, Conventional 1
Power, Renewable
Other
Total
20
42
Region
Category A Category B Category C All
Americas
Europe
Middle East & Africa 1
Asia Pacific
Total
20
6.5.2 Extractive projects supported by US Ex-Im Bank.
6.5.3 Tables and Graphs

6.5.3.1
Estimation of coverage of Intl. Transparency Reforms, by amount of companies
Supported by Ex-Im Bank

Covered by Dodd-Frank
Covered by EU-Directives
Covered by Dodd-Frank & EU-D.
Number of Companies
27
8
10
5
Table 1: Coverage of Intl. Transparency Reforms within Ex-Im Banks 2002-2012extractive portfolio, by
of FY 2002-2013
ExIm Bank
30
20
ExIm Bank
10
Dodd-Frank
EU-Direct.
EU-Direct.
Dodd-Frank
43
of FY 2002-2013
6.5.3.2
Estimation of coverage of Intl. Transparency Reforms, by amount of capital

Amount of Capital
$17,723,824,743
$5,836,940,215
$5,618,298,433
$4,608,085,458
amount of capital Source: table base don own estimation from US ExIm Banks Annual Reports of
FY 2002-2013
ExIm Bank
$20,000
$15,000
$10,000
ExIm Bank
$5,000
Dodd-Frank
$0
EU-Direct.
EU-Direct.
Dodd-Frank
amount of capital (In Millions) Source: table base don own estimation from US ExIm Banks Annual
Reports of FY 2002-2013
6.5.3.3
Estimation of coverage of Intl. Transparency Reforms, by amount of projects

Number of Projects
77
12
18
8
amount of projects Source: table base don own estimation from US ExIm Banks Annual Reports of
FY 2002-2013
44
6.5.3.4
Estimation of coverage of Intl. Transparency Reforms, by state-owned companies

Not Covered by Dodd-Frank & EU-D.
Not Covered & State-Owned
Number of Companies
27
14
7
Table 4: Amount of state-owned companies within Ex-Im Banks 2002-2012 extractive portfolio
Source: table base don own estimation from US ExIm Banks Annual Reports of FY 2002-2013

Not Covered by Dodd-Frank & EU-D.
Not Covered & State-Owned
Amount of Capital
$17,723,824,743
$10,876,671,553
$10,490,505,747
Table 4: Amount of capital invested by state-owned companies within Ex-Im Banks 2002-2012
extractive portfolio Source: table base don own estimation from US ExIm Banks Annual Reports of
FY 2002-2013
ExIm Bank
$20,000
$15,000
$10,000
ExIm Bank
$5,000
Not covered
$-
State-owned
State-owned
Not covered
Graph 4: Amount of capital invested by state-owned companies and supported by Ex-Im Banks 20022012 extractive portfolio (In Millions) Source: table base don own estimation from US ExIm Banks
Annual Reports of FY 2002-2013
45

Export Credit Agencies &amp; Extractive Industry Companies

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Export Credit Agencies &amp; Extractive Industry Companies

Uploaded by

Copyright:

Available Formats

International Financial Institutions: Transparency and disclosure

requirements for the extractive sector

Accessibility of Information .............................................................................................................36

Export-Import Bank of China

1 Export-Import Bank of China3

Report elaborated by Yousef Khalil, khaly129@newschool.edu, The New School University.

1.1 Transparency Policies

1.1.2 Contract Disclosure

China Exim Bank, "2012 Annual Report."

1.1.3 Mechanisms of Compliance

1.1.4 Accessibility of Information

1.2 Assessment of Transparency and Disclosure Requirements

2 The Korean Export Import Bank13

2.1 Financing in the Extractive Sector

2.2 Transparency Policies

However, article 94 states that18:

2.2.1 Accessibility of Information

2.2.2 Enforcement Mechanisms

2.2.3 Dodd-Frank, EU Directives, and IFC Sustainability Framework

3 United Kingdom Export Finance Department24

3.1 Financing in the Extractive Sector

3.2 Transparency and Accountability Policies

UKEF is required by ECG Common Approaches to conduct an environmental and social

3.2.1 Accessibility of Information

3.2.2 Enforcement Mechanisms

3.2.3 Dodd-Frank, EU Directives, and IFC Sustainability Framework

4 Compagnie Franaise d'Assurance pour le Commerce Extrieur39

4.1.1 Scope and Size of the Problem

4.1.2 Assessments from secondary sources

OECD Common Approaches. Page 9 Section 20.

These international standards include:

49 The IFC Environmental, Health and Safety Guidelines.

http://www.coface.fr/Garanties-publiques/Evaluation-environnementale-et-sociale PDF of Common

4.2.2 Mechanisms of Compliance

4.2.3 Accessibility of Information

Natixis 2012 Annual Report,

4.2.4 Comparison of Coverage

Extractive Industry Transparency Initiative. EITI. <http://eiti.org/eiti>

5 United States Export Import Bank

5.1.1 Reforms made to the Banks Policies

http://www.exim.gov/generalbankpolicies/environment/ - Accessed 11/25/2013

5.1.2 Financing in the Extractive Sector: Capital & Companies

Estimating the scope of transparency requirements of international financial

5.1.2.2 State-owned companies: key players

Due to the limited scope of transparency requirements of international financial reforms, it

5.2 Transparency Policies specific to the Extractive Industries

5.2.1 The Extractive sector within Ex-Im Banks Policies

Installations for storage of petroleum, petrochemical, or chemical products with a capacity

5.2.2 Transparency Policies and Extractive Projects

5.2.3 Mechanisms of compliance

These are coupled with three types of monitoring mechanisms:

In all cases, these said monitoring reports must provide

5.2.4 Accessibility of Information

5.3 Gaps, weaknesses, and recommendations

5.3.1 Contract and Payment transparency

5.3.2 Compliance with external standards and guidelines

5.3.3 Monitoring and enforcing mechanisms

5.3.4 Accessibility of Information

Chairman and President: Li Ruogu Vice President: Zhu Hongjie

6.2 Korea Export Import Bank

6.3 Compagnie Franaise d'Assurance pour le Commerce Extrieur

email address (garantiespubliques_environnement@coface.com) over the course of the

6.4 United Kingdom Export Finance Department

6.4.2 Annex - UKEF Extractive Industry Projects Funded from 2010-2013

Export Credit Agencies & Extractive Industry Companies

Export Credit Agencies & Extractive Industry Companies