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Monitoring the impacts of government and corporate behaviour in communities overseas.

EFIC's new Environment and Social Policy brings welcome changes

Release Date: 09-May-2011

Last week Australia’s export credit agency, EFIC, released the updated version of its Policy for Environmental and Social Review of Transactions. Jubilee’s long-term engagement in monitoring the activity of EFIC, and our continued calls for greater transparency paid dividends when the launch confirmed the adoption of new reporting and auditing procedures that go a considerable way to making the agency’s decisions more accessible and accountable to the public, including a commitment to arrange an independent audit of its adherence to the Policy every two years by an independent expert.

The updated Policy and Procedure launched on May 4, sets out how EFIC will review export finance applications for likely social and environmental impacts. When an Australian exporter applies to EFIC for financial assistance, whether the company is seeking a loan, guarantee or other such product to assist it in winning business in an overseas markets, EFIC is obliged to review the application for its likely social and environmental impacts, thanks to efforts by campaigners in Australia to make sure EFIC adopted an Environment Policy back in 2000. Given that EFIC financing of mines and other extractive projects in the Pacific and Africa is on the increase, this process is of vital importance, especially for communities living in surrounding areas, whose very livelihoods are affected by these projects.

In 2010 EFIC undertook a review of its Environment Policy, coinciding with the release of Jubilee’s Risky Business report (December 2009) case studying EFIC involvement in the gold mine in Solomon Islands and the PNG LNG project. The report successfully drew the attention of other civil society groups, individuals, academics and members of parliament to the high stakes of EFIC finance decisions for communities in the Pacific.

As part of the Review, EFIC considered the views of civil society organisations including Jubilee Australia and Oxfam Australia. EFIC even agreed to host a full day independently facilitated workshop in December 2010 to discuss CSO recommendations.

 “We congratulate EFIC on making changes to the Policy and Procedure for Environmental and Social Review of transactions that demonstrate a genuine intention to find a more appropriate balance between public accountability and the commercial interests of Australian corporations,” said Adele Webb, Jubilee Australia Director.

Looking to the future, there is still more work to be done by governments around the world, including Australia, to ensure their national export credit agencies do not facilitate irreversible environmental damage, social unrest and the violation of human rights in less-developed countries.