What is PWYP’s ask?

Publish What You Pay (PWYP) calls for export credit agencies (ECAs) to require the public disclosure of all payments (taxes, fees, royalties and other transactions) as a condition of their support to extractive industry companies seeking loans, guarantees and risk insurance. PWYP also calls for the public disclosure of associated foreign investment contracts which establish the terms of these payments (e.g., Production Sharing Agreements, Host Government Agreements).

What are export credit agencies?

ECAs are government agencies and government-backed finance institutions that extend government-backed export credits, loans, insurance and investment guarantees to companies operating high-risk areas abroad, including many resource-rich developing countries.

ECAs are the largest providers of public finance to private-sector projects in the world, particularly in the extractive industries. Collectively, ECAs are now the largest class of public financial institutions, far exceeding the World Bank Group in terms of financing provided to private companies.

Why does PWYP focus on export credit agencies?

Revenue and contract transparency criteria, attached as a condition to all export credit financing agreements, will apply to a large number of oil, gas and mining projects being undertaken by both transnational companies and state-owned companies . For example, large multinational companies developing oil fields in Angola do so in partnership with the national oil company Sonangol, and with ECA support. Both extractive companies would be covered by revenue and contract transparency requirements if ECAs required this transparency as a condition of their financing.

PWYP’s work on export credit agencies

Since 2005 PWYP members and participants of ECA-Watch included contract and revenue reform within their larger reform agendas for both individual ECAs at the Export Credit Group (ECG) of the Organization for Economic Cooperation and Development (OECD). This includes advocacy aimed at the ECG renegotiation of the Common Approaches (common environmental and social policies for ECAs and NGOs submissions on the renegotiation of the OECD Action Statement on Bribery and Officially Supported Export Credits. Unfortunately, due in part to the sluggishness of ECAs, this effort must be considered to be at an early phase. Meanwhile, the call for increased revenue and contract transparency has emerged in multilateral finance institutions including in the policies of the European Bank for Reconstruction and Development (revenue reforms only), the IFC and IMF (revenue and contract transparency provisions).

In the US, groups led by Pacific Environment, Oxfam America, Environmental Defense and Global Witness have advocated for inclusion of contract and revenue transparency reform through the process of Congressional reauthorization of the US Export-Import Bank (the US ECA) and the US Overseas Private Investment Corporation (OPIC, another type of US government finance institutions). In 2006 OPIC announced the small step of support for the Extractive Industry Transparency Initiative, which requires some revenue transparency. Pending legislation to reauthorize OPIC contains more revenue and contract transparency provisions. These provisions are modeled after legislation calling on the US Treasury to seek revenue and contract transparency in extractive projects financed by multilateral banks to which the US is a member (World Bank Group).

Similarly, Global Witness, CAFOD and other UK-based groups have begun discussions in the UK regarding application of these transparency reforms at the Export Credit Guarantee Department (ECGD).

Meanwhile, NGOs working on high-profile extractive sector projects, such as the Chad-Cameroon pipeline, the Baku-Tbilisi-Ceyhan pipeline and the Sakhalin II oil and gas project, have focused extensively on the social, human rights and environmental implications of foreign investment contracts, as well as the resulting project revenue flows (or the lack thereof). For many NGOs, non-fiscal aspects of these contracts are of as much concern as the transparency of revenue flows.

For more information please contact Doug Norlen from PWYP member organisation Pacific Environment.