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LATEST NEWS

Concerns Over Bill to Amend Efic

Release Date: 14-Feb-2019

Yesterday the Government introduced a bill to amend Efic. If approved, Efic would change its name to Export Finance Australia and take responsibility for a $1 billion fund with the objective of supporting infrastructure in the region. Worryingly, lending money through this mechanism could only occur if the infrastructure project would result in an “Australian benefit”.

This would be a dramatic change. Stephen Howes, the Director of the Development Policy Centre, has outlined a range of concerns. The four major concerns are: (1) the risk that they will give a green light to Australian businesses in neighbouring countries to push projects, (2) that it is the domestic policy framework, which Efic has no control over, that matters for infrastructure success, (3) Efic mandate has always been and remains to promote Australian exports and business and (4) we will move from too little support for Pacific infrastructure to an overly complex architecture.

Jubilee Australia endorses these concerns raised above as we have similar ones. However, we would like to add to this conversation, as the amendments raise grounds for further worries:

‘The first is that this amendment is clearly intended partly for fossil fuel development’, said Dr Luke Fletcher of Jubilee Australia. ‘This is a deeply irresponsible move, especially in the light of the alarming IPCC report late last year that warned us that we have 12 years to limit climate change catastrophe. This will do the complete opposite and add to the world’s unhealthy addiction to fossil fuels.’

‘The second concern is that Efic has poor transparency and accountability with regard to its social and environmental assessment processes. Because of this, they have a history of involvement with questionable projects. This includes the PNG LNG project, of which Efic lent $500 million taxpayer money to. Our research shows that the project is an abject failure as it resulted in PNG going backward on most economic indicators and an increase in violence. The Government should ask themselves if this is the type of development projects that they want to put money towards.