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10 Export Credit Agencies and Corporate Conduct in Conflict Zones

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Profiting from Peace
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Many companies operating overseas, including those in the extractiveindustry sector, routinely seek to reduce the financial risks of their opera-tions, including the risks of project failure due to conflict, through the gov-ernment-backed export credits and investment guarantees offered by publicexport credit agencies (ECAs). Set up by governments to assist companiesin exporting capital and project-related goods and services, ECAs are pub-lic agencies that typically provide export finance in the form of govern-ment-backed loans, guarantees, and insurance to private corporations fromtheir home country to do business abroad.The oil, mining, and gas sectors—industries often associated withrepressive regimes, political instability, and violent conflict—have longbeen major recipients of official export credit support. Extractive industryprojects in countries prone to, experiencing, or emerging from armed con-flict that have received such support include the Lihar gold and OK Tedicopper mines in Papua New Guinea, the Freeport McMoRan gold mine inIndonesia, the Chad-Cameroon pipeline project, and the Baku-Tbilisi-Ceyhan pipeline project in the Caspian region.1Without such exportfinance, many large-scale private-sector extractive and extractive-relatedinfrastructure projects in developing countries would not attract investmentor project finance from private financial markets—quite simply, the riskswould be considered too high.2ECA involvement provides “comfort” towould-be private-sector investors in the form of an assurance that the proj-ect has the backing of institutions with sufficient political muscle to ensurethat debts and contracts will be honored by the host country. As such, ECAsalso have the broad potential to promote corporate responsibility among10Export Credit Agencies and Corporate Conduct in Conflict ZonesNicholas Hildyard235B-10 6/16/05 1:51 PM Page 235
© 2022, Lynne Rienner Publishers, Boulder, USA

Many companies operating overseas, including those in the extractiveindustry sector, routinely seek to reduce the financial risks of their opera-tions, including the risks of project failure due to conflict, through the gov-ernment-backed export credits and investment guarantees offered by publicexport credit agencies (ECAs). Set up by governments to assist companiesin exporting capital and project-related goods and services, ECAs are pub-lic agencies that typically provide export finance in the form of govern-ment-backed loans, guarantees, and insurance to private corporations fromtheir home country to do business abroad.The oil, mining, and gas sectors—industries often associated withrepressive regimes, political instability, and violent conflict—have longbeen major recipients of official export credit support. Extractive industryprojects in countries prone to, experiencing, or emerging from armed con-flict that have received such support include the Lihar gold and OK Tedicopper mines in Papua New Guinea, the Freeport McMoRan gold mine inIndonesia, the Chad-Cameroon pipeline project, and the Baku-Tbilisi-Ceyhan pipeline project in the Caspian region.1Without such exportfinance, many large-scale private-sector extractive and extractive-relatedinfrastructure projects in developing countries would not attract investmentor project finance from private financial markets—quite simply, the riskswould be considered too high.2ECA involvement provides “comfort” towould-be private-sector investors in the form of an assurance that the proj-ect has the backing of institutions with sufficient political muscle to ensurethat debts and contracts will be honored by the host country. As such, ECAsalso have the broad potential to promote corporate responsibility among10Export Credit Agencies and Corporate Conduct in Conflict ZonesNicholas Hildyard235B-10 6/16/05 1:51 PM Page 235
© 2022, Lynne Rienner Publishers, Boulder, USA

Chapters in this book

  1. Frontmatter i
  2. Contents v
  3. Foreword vii
  4. Acknowledgments xi
  5. 1 Introduction 1
  6. 2 Natural Resources and Armed Conflicts: Issues and Options 25
  7. PART 1 Curtailing Conflict Trade and Finance
  8. 3 What Lessons from the Kimberley Process Certification Scheme? 45
  9. 4 Tracking Conflict Commodities and Financing 69
  10. 5 Lessons from the UN’s Counterterrorism Efforts 95
  11. 6 Combating Organized Crime in Armed Conflict 123
  12. 7 Protecting Livelihoods in Violent Economies 153
  13. PART 2 Improving Corporate Responsibility and Resource Management
  14. 8 Assessing Company Behavior in Conflict Environments: A Field Perspective 183
  15. 9 Private Financial Actors and Corporate Responsibility in Conflict Zones 207
  16. 10 Export Credit Agencies and Corporate Conduct in Conflict Zones 235
  17. 11 Revenue Transparency and the Publish What You Pay Campaign 263
  18. 12 Development Assistance, Conditionality, and War Economies 287
  19. PART 3 Establishing Accountability, Ending Impunity
  20. 13 Regulating Business in Conflict Zones: Challenges and Options 315
  21. 14 Conflict Management and the OECD Guidelines for Multinational Enterprises 345
  22. 15 Improving Sanctions Through Legal Means? 377
  23. 16 Corporate Accountability Under the U.S. Alien Tort Claims Act 395
  24. 17 War Economies, Economic Actors, and International Criminal Law 425
  25. PART 4 Conclusion
  26. 18 Peace Before Profit: The Challenges of Governance 445
  27. Acronyms 485
  28. Selected Bibliography 489
  29. The Contributors 509
  30. Index 515
  31. About the Book 539
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https://doi.org/10.1515/9781685857561-012

Chapters in this book

  1. Frontmatter i
  2. Contents v
  3. Foreword vii
  4. Acknowledgments xi
  5. 1 Introduction 1
  6. 2 Natural Resources and Armed Conflicts: Issues and Options 25
  7. PART 1 Curtailing Conflict Trade and Finance
  8. 3 What Lessons from the Kimberley Process Certification Scheme? 45
  9. 4 Tracking Conflict Commodities and Financing 69
  10. 5 Lessons from the UN’s Counterterrorism Efforts 95
  11. 6 Combating Organized Crime in Armed Conflict 123
  12. 7 Protecting Livelihoods in Violent Economies 153
  13. PART 2 Improving Corporate Responsibility and Resource Management
  14. 8 Assessing Company Behavior in Conflict Environments: A Field Perspective 183
  15. 9 Private Financial Actors and Corporate Responsibility in Conflict Zones 207
  16. 10 Export Credit Agencies and Corporate Conduct in Conflict Zones 235
  17. 11 Revenue Transparency and the Publish What You Pay Campaign 263
  18. 12 Development Assistance, Conditionality, and War Economies 287
  19. PART 3 Establishing Accountability, Ending Impunity
  20. 13 Regulating Business in Conflict Zones: Challenges and Options 315
  21. 14 Conflict Management and the OECD Guidelines for Multinational Enterprises 345
  22. 15 Improving Sanctions Through Legal Means? 377
  23. 16 Corporate Accountability Under the U.S. Alien Tort Claims Act 395
  24. 17 War Economies, Economic Actors, and International Criminal Law 425
  25. PART 4 Conclusion
  26. 18 Peace Before Profit: The Challenges of Governance 445
  27. Acronyms 485
  28. Selected Bibliography 489
  29. The Contributors 509
  30. Index 515
  31. About the Book 539
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