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 2 Table of Contents INTRODUCTION ........................................................................................................................................ 4 LIST OF ACRONYMS ................................................................................................................................. 5 1 EXPORT-IMPORT BANK OF CHINA ................................................................................................. 6 1.1TRANSPARENCY POLICIES ........................................................................................................................... 7 1.1.1Payment Disclosure ............................................................................................................................... 7 1.1.2Contract Disclosure ................................................................................................................................ 7 1.1.3Mechanisms of Compliance ................................................................................................................ 8 1.1.4Accessibility of Information ............................................................................................................... 8 1.2ASSESSMENT OF TRANSPARENCY AND DISCLOSURE REQUIREMENTS ................................................. 8 1.3CONCLUSIONS ................................................................................................................................................ 9 2 THE KOREAN EXPORT IMPORT BANK ....................................................................................... 10 2.1FINANCINGINTHEEXTRACTIVESECTOR ............................................................................................ 10 2.2TRANSPARENCYPOLICIES ....................................................................................................................... 10 2.2.1AccessibilityofInformation ............................................................................................................ 11 2.2.2Enforcement Mechanisms ................................................................................................................. 11 2.2.3Dodd-Frank,EUDirectives,andIFCSustainabilityFramework .................................. 11 3 UNITED KINGDOM EXPORT FINANCE DEPARTMENT .......................................................... 13 3.1FINANCING IN THE EXTRACTIVE SECTOR .............................................................................................. 13 3.2TRANSPARENCY AND ACCOUNTABILITY POLICIES ............................................................................... 13 3.2.1Accessibility of Information ............................................................................................................. 16 3.2.2Enforcement Mechanisms ................................................................................................................. 16 3.2.3Dodd-Frank, EU Directives, and IFC Sustainability Framework ..................................... 16 4 COMPAGNIE FRANAISE D'ASSURANCE POUR LE COMMERCE EXTRIEUR ................. 18 4.1BACKGROUND ............................................................................................................................................. 18 4.1.1Scope and Size of the Problem ........................................................................................................ 18 4.1.2Assessments from secondary sources .......................................................................................... 19 4.2TRANSPARENCY ......................................................................................................................................... 19 4.2.1Payment and Contract Disclosure................................................................................................. 19 4.2.2Mechanisms of Compliance .............................................................................................................. 21 4.2.3Accessibility of Information ............................................................................................................. 21 4.2.4Comparison of Coverage .................................................................................................................... 22 4.3RECOMMENDATIONS ................................................................................................................................. 22 5 UNITED STATES EXPORT IMPORT BANK ................................................................................. 23 5.1BACKGROUND ............................................................................................................................................. 23 5.1.1Reforms made to the Banks Policies ........................................................................................... 23 5.1.2Financing in the Extractive Sector: Capital & Companies ................................................. 24 5.2TRANSPARENCY POLICIES SPECIFIC TO THE EXTRACTIVE INDUSTRIES ........................................... 27 5.2.1The Extractive sector within Ex-Im Banks Policies .............................................................. 27 5.2.2Transparency Policies and Extractive Projects ...................................................................... 30 5.2.3Mechanisms of compliance............................................................................................................... 32 5.2.4Accessibility of Information ............................................................................................................. 33 5.3GAPS, WEAKNESSES, AND RECOMMENDATIONS ................................................................................... 35 5.3.1Contract and Payment transparency .......................................................................................... 35 5.3.2Compliance with external standards and guidelines ........................................................... 35 5.3.3Monitoring and enforcing mechanisms...................................................................................... 35 3 5.3.4Accessibility of Information ............................................................................................................. 36 6 ANNEXES............................................................................................................................................... 37 6.1EXPORT-IMPORT BANK OF CHINA .......................................................................................................... 37 6.2KOREA EXPORT IMPORT BANK ............................................................................................................... 37 6.3COMPAGNIE FRANAISE D'ASSURANCE POUR LE COMMERCE EXTRIEUR ...................................... 37 6.4UNITED KINGDOM EXPORT FINANCE DEPARTMENT .......................................................................... 38 6.4.1Advocacy Recommendations ........................................................................................................... 38 6.4.2Annex - UKEF Extractive Industry Projects Funded from 2010-2013 .......................... 39 6.5UNITED STATES EXPORT IMPORT BANK ............................................................................................... 42 6.5.1Projects complying with Equator Principles ............................................................................ 42 6.5.2Extractive projects supported by US Ex-Im Bank. ................................................................. 43 6.5.3Tables and Graphs ................................................................................................................................ 43 4 Introduction Terra Lawson-Remer, J.D., PhD, Assistant Professor Manuel Valderrama Florez, PhD Student ThepresentreportisproductofacollaborativeresearchprojectbetweenRevenueWatch 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 improveglobalgovernanceofextractiveindustries,bypromotingthetransparentand accountable management of oil, gas and mineral resources. For this, the research addressed twomaintopics:a)transparencyanddisclosurerequirementsintheofficialdevelopment finance(privatesectordevelopmentloansandsovereignriskguarantees)frombilateral import-exportcreditagenciesandmultilaterals,andb)beneficialownershipinthe extractiveindustriessector.Thesedistinctarmsweredevelopedandmaterializedintwo respectivedeliverables.Allresearchandtheirrespectivedeliverableswereexecutedand written by the class of the Resource Curse course of the fall semester of 20131. Themainobjectiveofthefirstarmoftheresearchprojectwastoexaminethecurrent requirementsofInternationalFinanceInstitutionsregardingrevenue,payment,and contractdisclosure.Inadditiontomappingthesesaidrequirements,theprojectalso assessedhowdidthesecomparetothoseincludedinthe2012IFCSustainability Framework,andtonewUS-EUmandatorydisclosurerulesthroughstockmarket 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,estimatedthecoverageofstockmarketregulationsintermsofprojectsandcapitalwherepossible-.TheresearchersusedexistingRWIcommentsonIFIpolicies(e.g.EBRD andUSEx-Im),internationalgoodpractices(e.g.IMFGuideonResourceRevenue Transparency),NewSchoolsResourceCursecourseliterature,andothersecondary literature, for the assessments. Additionally, the project also described the key stakeholders and decision makers of the IFIs examined. Duetoitsextent,thedeliverableforthefirstarmofthisresearchwasdividedintotwo reports,accordingtothetypeofIFI:a)DevelopmentFinanceInstitutions(DFI),andb) Export-CreditAgencies(ECA).Thisdocumentaddressestransparencyanddisclosure requirementsinExportCreditAgencies.Eachchapterdevelopstheabove-mentioned researchobjectivestotheextentthatwaspossibleduetoinformationconstraints2-,and presentstheresultsinfourbroadsections:backgroundinformationofeachDFI,contract andpaymenttransparencyrequirements,acomparisonofthesesaidrequirementswith mandatory disclosure rules through stock market regulations, and policy recommendations. The DFIs examined in this document are the following: i)Export-Import Bank of China ii)Korean Export-Import Bank, iii)United Kingdom Export Finance Department, iv)Compagnie Franaise d'Assurance pour le Commerce Extrieur, v)United States Export-Import Bank

1 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. 5 List of Acronyms ADB: Asian Development Bank AfDB: African Development Bank ATI: Aid Transparency IndexBTC Pipeline: BakuTbilisiCeyhan pipeline China ExIm: The Export-Import Bank of China COFACE: The Compagnie Franaise d'Assurance pour le Commerce Extrieur COO: Country of OperationCSE: Civil Society Engagement UnitCSO: Civil Society Organization EA: Environmental AnalysesEU: European UnionEBRD: European Bank for Reconstruction and Development ECA: Export-Credit Agency ECG: Export Credits and Credit GuaranteesEI: Extractive IndustryEIA: Environmental Impact AssessmentsEITI: Extractive Industry Transparency Initiative ESHR: Environmental, Social and Human RightsESIA: Environment and Social Impact Assessment ESMR: Environmental and Social Management ReportsESS: Environmental and Social StrategiesEU: European Union Dodd-Frank: Dodd- Frank Wall Street Reform and Consumer Protection Act ICC: Inter-American Investment CorporationIDB: Inter-American Development Bank IFC: InternationalFinanceCorporation IFI: International Institution JBIC: The Japan Bank for International Cooperation KEXIM: Korea Export Import Bank LAC: Latin America and the CaribbeanMIGA: The Multilateral Investment Guarantee Agency OECD: Organization for Economic Cooperation and Development OPIC: Overseas Private Investment CorporationPCM: Project Complaint MechanismPIP: Public Information PolicyPSD: Project Summary DocumentPWYP: Publish What You Pay RWI: Revenue Watch Institute SCF: Structured and Corporate FinanceSDR: Special Drawing RightsSEA: Strategic Environmental AnalysesSEC: U.S.SecuritiesandExchangeCommission USEx-Im: United States Export Import Bank UKEF: United Kingdom Export Finance Department WBG: World Bank Group 6 1 Export-Import Bank of China3 TheChinaExportImportBank(ChinaExIm)isoneofamyriadofgovernmentfinancial institutionsofthePeoplesRepublicofChina.ExIm,thankstomassivecashreserves generatedbyChinasexportleadgrowthmodel,isbecomingakeyplayeronthe internationalstageinitsownright.Itisoneofthelargestsuppliersofcreditintheworld, 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,andofteninexchangeforsomesortofresourceprocurement.Chinesegrowthis 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 hasbeendeflectinggrowthoutwardtocoolthingsdown,whileatthesametimesecuring favorableresourceextractiondealsfromforeigngovernmentsbyexchangingcreditand infrastructureprojectsforfavorabletradeterms.Thisparticularconfluenceofeconomic 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 ofreserves,whichcannotjustbuyUStreasuries.Weneedtousepartoftheminoverseas investments.Africaforthenext20yearswillbethesingle-mostimportantbusiness destinationformanyChinesemegacorporationsZhoasaid,beforeclaimingthatChina 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. Accordingtoits2012annualreport,ChinaEximBankhasloaned8.81percentofitstotal 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

3 Report elaborated by Yousef Khalil, khaly129@newschool.edu, The New School University. 4 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-africa-us1tr-financing 5 ChinaEximBank,"2012AnnualReport."Lastmodified2013.AccessedOctober15,2013. http://english.eximbank.gov.cn/annual/2012/201208.pdf. 7 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. Asfiguresarenotbrokendownbyindustryinannualreportsbefore2012,numbersfor extractiveindustryloanscanbeestimatedforthelastdecadebytakingthe8.81percent figurefromthe2012annualreportandapplyingitthefiguresoftotalloansfromthe previoustenyearsofreports.Whileitisnotpossibletodeterminethenumbers definitivelyunlesstheExImbankreportsthem,thismethodallowsforareasonable estimateof53.511billionUSDintotalloanstoextractiveindustryprojectsoverthelast decade. YearTotal Loans According to Annual ReportsTotal 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 Table1:EstimatedtotalofloansfromChinaExImtoextractiveindustryprojects,fiscalperiod2003-2012 Source: Own estimation based on 2012 data. ChinaEximpublishesrevenuefiguresinitsannualreports.Thesefiguresarenotbroken downbysectororrecipientstate,however.Accordingtothe2012report,theEximBank had a net revenue of 3,858,548,000RMB or 633,318,917 USD. 1.1Transparency Policies 1.1.1Payment Disclosure China Exim Bank has no specific payment disclosure requirements for extractive industries. If figures are available, they are made so by recipient governments 1.1.2Contract Disclosure As with payment disclosures, China Exim Bank has no specific payment contract disclosure requirementsforextractiveindustries.Iffiguresareavailable,theyaremadesoby recipientgovernments.ThetermsofextractivecontractsareintegraltoChineseforeign policy and are therefore not made widely available to the public.

6 ChinaEximBank,"2012AnnualReport." 8 1.1.3Mechanisms of Compliance TherearenospecificrequirementsforChinaEximBankatthemoment,althoughitdoes publish top line figures in its annual review. 1.1.4Accessibility of Information TheBankswebsitehasitsentireannualreportsavailableonlinegoingbackto2003, althoughthe2003reportisonlyavailableinChinese.Theyareavailableinareavailable inEnglishfrom2004onhowever,thelinkstothePDFdocumentscurrentlyarenot functioning for all but the last four annual reports, and those reports that are accessible are cumbersome to navigate and slow to load. 1.2Assessment of Transparency and Disclosure Requirements TheChinaEximBankoperatesasanintegralcomponentofChineseforeignpolicy.Oneof Chinasprimaryforeignpolicygoalsistheprocurementofnaturalresourcesandthe stimulationoftheindustrialaddedvalueexports.Detailsaboutthespecifictermsand figuresforitsbilateralagreementsarenotwidelyreleasedinEnglishorChinese.Likethe restofthePeoplesRepublicofChinas(PRC)developmentaidandforeigninvestment institutions, the Exim Banks data and power structure is notoriously opaque. Naturalresourceprocurement,akeycomponentofChinesenationalsecurityinterests, isconductedthroughinstitutionssuchastheEximBankthroughtheexchangeof concessionalloansorinfrastructureprojectsfornaturalresourceimportdealswith recipientstates.TheinfrastructureprojectsareusedtosubsidizeChinesecontractors, whichhavebeenlookingtoexpandoverseas,havingoverheatedthedomesticmarketin spectacularfashionoverthelastdecade.Thisstrategyhasbeenwidelystudiedasithas been implemented in Africa, where the China Exim bank finances roughly half of all Chinese loans.ChinaisexpectedbysomeanalyststoreachitsambitiousgoalofprovidingAfrican stateswithmorethan$20billioninloansby2015.Intheextractivesector,projectslikea $3billionoffshoreoilprocessingplant,onshoretrunkpipeline,andpetroleumterminalin Ghanaarecommonacrossthecontinent.Thisparticulardealwasaccompaniedbya concurrentagreementwithSinopec,thePRCsnationalpetroleumcompany,whichwas guaranteedthe13,000barrelsperdayofcrudeoil.7USDepartmentofStateofficials 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, havecriticizedtheChinaEximBankfornotcomplyingwithOECDfinancialguidelines, which they claim gives the bank an unfair advantage.8 ResearchersandjournalistslookingtoanalyzeChineseaidpolicymustoftenresortto slightlybetterChineselanguagesources,Chineseacademics,orChinesemediaoutlets,the latterarecloselyassociatedwiththestate,however.Eventhesesourcesareoften incomplete.

7 Nyabiage, Jevans. Standard Digital, "China Development Bank leads Beijings soft power agenda." Last modified October 14, 2013.AccessedOctober15,2013.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. 9 AlthoughChineselanguagesourcesarevitalinprovidingsomeofthesedetailsthatmight otherwisebemissed,theyareunfortunatelyincompleteinthattheydonotreportall,or eventhe majorityof concessional loansthatare made. They allow us to better educate our guessesabouttypicalloansizeandsector,butdonotprovideenoughinformationwith whichtoanalyze Chinese lending systematically.9 ThePRCgovernmenthasreleasedspecifics,sporadicallysince1997,butinincomplete segmentsthathighlightachievementsexclusively.SomeanalystsarguethattheChinese governmentispurposelyopaquebecauserevealingtermsofconcessionalloansmay exposethenominallydevelopmentaidasacommercialsubsidesprogram,negatingthe abilityofthePRCtocultivategoodwillfromtheinternationalperceptionofitsrobust developmentprogram.10FindinginformationonChineseaidislikeputtingtogethera jigsawpuzzle.Thisisofcoursealsothecasewithotherdonorsbutthemissingpiecesare stilllargerandoftenlesscomparableinthecaseofChina.11 Beijingmayalsobeoptingto keepcountrybycountrydatasecretetopreventrecipientcountriesfromunderstanding regionalpolicystrategies.Therearedomesticconsiderationsthatcouldalsoweighheavily onPRCdecisionmakers,asitwouldcertainlyprovepoliticallytoxictodisclosetheextent of aid to other countries given the massive internal contradictions of the Chinese economic expansion. 1.3Conclusions 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 figuresinfuturereportswouldbeasatisfactoryinitialstep.Publishingthesefigureswould alleviateanxietiesinthedevelopingworld,particularlyinAfrica,abouttheintentionsof Chineseaidpoliciesandcontributetoamoreinclusiveapproachtodevelopmentaidand Chinese foreign investment. Chinese institutions have shown remarkable resilience and very low transparency or accountability by Western standards and will likely be unresponsive to externalpressuretochange.DespiteChinasrecenteffortstomovetowardsustainable 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 fewdecadesarebeingfeltnowascitiesacrossthecountryarefrequentlyenvelopedin hazardous smog. There have been signs of a growing environmental movement12 as a result, whichthoughaimedatdomesticproblems,mayopenavenuesforinfluencingBeijinginits sometimes pollution prone extractive industry funding abroad.

9 Hubbard, Paul. Center For Global Development, "Aiding Transparency: What We Can Learn About China ExIm Banks ConcessionalLoans." Last modified September 2007. Accessed October 15, 2013., 3 10 Ibid., 711 Grimm, Sven. PublishWhatYouFind; The Global Campaign for Aid Transparency, "Transparency of Chinese Aid: an analysis of thepublished 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/ 10 2 The Korean Export Import Bank13 TheRepublicofKoreaestablishedtheKoreanExportImportBank(KEXIM)in1976to promote Korean exports and improve Korean economic development. It offers export loans, tradefinance,andguaranteestoKoreancompaniesortocompaniesthatareheavily 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 2.1FinancingintheExtractiveSector TheKoreanEximBankonlyfundsprojectsthatinvolveKoreanownedcompaniesor companies heavily invested in by a Korean owned company. The types of projects financed bythebankincludeallstagesofoil,gasandminingdevelopmentandagricultural investment.Informationisonlyavailableintheaggregateandthereisverylittle breakdown.Thebankcurrentlyhas$41millioninvestedinquarryingandmining worldwide and $3 million invested in electricity, gas, steam, and water supply industries.16 2.2TransparencyPolicies The bank states that it follows generally accepted disclosure practices as they exist in South Koreaanditclaimstohaveadoptedtransparentmanagementpracticestoincreasepublic 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)Afinancialinstitutionshallnotbehaveinanymannerunderthefollowingitemswhen 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)Expressinmisleadingorambiguouswayoncomparativeadvantagesoverother 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 publicincluding contract terms and transaction costs, etc.

13 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 11 However, article 94 states that18: 1)TheprovisionsofArticles5through25,Article26,Paragraph(1),Item2,Article26, Paragraph (3), Article 32, Paragraphs (3) through (5), Articles 33 through 48, Article 50, Article51,Articles52-2through52-5,provisoofArticle53,Paragraph(1),Article54, Article59,Article74,Articles79through89,andArticle91shallnotapplytothe KEXIM. 2)The Governor may forbear to order the KEXIM to write-off specific bad assets pursuant toArticle27,Paragraph(7)ifitjudgesthattheordermaycauseanydiplomaticor commercial problems. 3)UnlessprescribedotherwiseinthisRegulation,theprovisionsunderArticle92, Paragraph (3), and Paragraphs (5) through (8) shall apply to the KEXIM. Thereseemstobenorequirementsbythebanktoobligateorevenjusttoencourage borrowers to disclose revenue, payments, or contracts.19 2.2.1AccessibilityofInformation InformationontheKoreanEximBankisverydifficulttoaccess.Itswebsitelacksasearch functionandinformationisextremelydisorganized.Thebank'swebsitestatesthat Englishlanguagepageswerenotofficialpagesbankdocuments.Allofficialdocumentsfor thebankareinKoreanthatsignificantlylimitsaccessibilityofinformationonbank policiesandprojects. 2.2.2Enforcement Mechanisms Theredoesnotappeartobeanyrequirementstoenforce. 2.2.3Dodd-Frank,EUDirectives,and IFCSustainabilityFramework TheKoreanEximBankhasaveryminimaltransparenceandaccountabilityframework.Assuch,ifitwastoimplementpoliciesintheIFCframework,nearlyallofitspolicies and proceduresrelatingtotransparencyandaccountabilitywouldberewrittenand changed.20 ItisunclearhowDodd-FrankandtheEUDirectiveswillaffectthecompaniesthat typicallyborrowfromthisbank.TheKoreanEXIMBankiscompletelycontrolledand fundedbytheKoreangovernment.21Furthermore,itonlyfundsKoreanowned companiesorforeigncompanieswhereaKoreancompanyhasaseriousinvestment22. SinceDodd-FrankonlyappliestocompanieslistedinU.S.stockexchangesitisunlikelyto

18 Regulation on Supervision of Banking Business. Financial Services Commission. 03May07. http://fsc.go.kr/eng/lr/list.jsp?menu=0302&bbsid=BBS0055 19 Banking Regulations Korean Financial Services Commission. Accessed on 02Nov13. http://fsc.go.kr/eng/lr/list.jsp?menu=0302&bbsid=BBS0055 20 Banking Regulations Korean Financial Services Commission. Accessed on 02Nov13. http://fsc.go.kr/eng/lr/list.jsp?menu=0302&bbsid=BBS0055 21 Ibid. 22 Natural Resources Development Finance. Korea EximBank. Accessed 02Nov13. http://www.koreaexim.go.kr/en/banking/Natural.jsp 12 havemuchofanimpactontheKoreanEximBanksinceitonlylendsmoneytoKorean companies.The bank does not publish which companies have received loans from it so it is hardtodeterminewhateffectDodd-Frankwillhaveinregardstoborrowersofthis institution. AccordingtotheNewYorkStockExchangeonlynineKoreancompaniesarelistedonthe U.S. exchanges.23These companies are KB Financial, Korea Electric Power, KT Corporation, LG Display, MagnaChip, POSCO, Shinhan Financial, SK Telecom, and Woori Finance.

23 Korean Economic Summit at the NYSE. New York Stock Exchange. Accessed 18Nov13. https://exchanges.nyx.com/marc-iyeki/korea-economic-summit-nyse 13 3 United Kingdom Export Finance Department24 TheUnitedKingdomExportFinanceDepartment(UKEF)formerlyknownasExports CreditsGuaranteeDepartment(ECGD)istheUKsexportcreditagencyandtheoldest nationalexportbankintheworldhavingstartedin1919.25 ThepurposeofUKEFisto complementtheprivatemarketbyprovidingassistancetoexportersandinvestors, principallyintheformofinsuranceandguaranteestobanks.Thetwoprimarypoliciesof UKEFareachievingstrongandsustainableeconomicgrowthandincreasingtheUKs exports and attracting inward investment. 3.1Financing in the Extractive Sector Thesefiguresareunclearbecausetheyarenotcodedinawaythatindicatesthatprojects are part of extractive industries.UKEF funded UK businesses a total of 4.3 billion in 2012-2013,thisisanincreasefrom2.3billionin2011-2012.26 UKEFissupportingindustries includingaerospace,automotive,oilandgasanddefense.Theirfundingrangesfromas littleas4,000to2billionandhasallowedforUKbusinessestoexportto58countries around the world27. UKEFpublishespartialinformationregardingthecompaniesitinsuresandtheprojects they support.There is partial project information in their annual reports going back three years.AllavailableprojectsarelistedinAnnex6.42-UKEFExtractiveIndustryProjects Funded from 2010-2013. 3.2Transparency and Accountability Policies UKEFstatesinitsannualreportthataprincipleitholdsinconductingitsbusinessisto takeaccountoffactorsbeyondpurelyfinancialandofrelevantgovernmentpoliciesin respect of environmental, social and human rights impacts; debt sustainability; and bribery and corruption. In2000,UKEFintroducedtheBusinessPrinciplesandanassociatedBusinessPrinciples Unitafteracomprehensivereviewofthedepartment.SecretaryofState,StephenByers, designed the principles for Trade and Industry with the intention to promote a responsible approachtobusinessandensureouractivitiestakeintoaccounttheGovernments internationalpolicies,includingthoseonsustainabledevelopment,environment,human rights,goodgovernanceandtrade.28 TheBusinessPrinciplesUnitwaschargedwith

24 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. . 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. . 27 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. . 28 A History of Neglect UK Export Finance and Human Rights. Rep. Amnesty International, June 2013. Web. . 14 implementinganassessmentcalltheCaseImpactAnalysisProcess.TheCIAPwouldthen inform the review of applications to the UKEF.29 In 2010 UKEF abandoned the Business Principles and closed the BPU. Corner House is a UK- basedadvocacyorganizationandhaswrittenseveraldifferentreportsaboutUKEF.Thea reporttitledTurningaBlindEye,CorruptionandtheUKExportCreditsGuarantee Department by Dr. Susan Hawley, the author wrote, Its[UKEF]decisionin2011toabandonitspreviousBusinessPrinciplesandtoexempt applications under 10 million in value or with repayment terms of less than two years from mandatoryenvironmentalandsocialassessmentmeansthatitismovingawayfrom compliance with the EU acquis30, not closer to it31. In2008theWorkingPartyonExportCreditsandCreditGuarantees(ECG)withinthe Organization for Economic Cooperation and Development (OECD) wrote the Principles and GuidelinestoPromoteSustainableLendingPracticesintheProvisionofOfficialExport Credits to Low Income Countries.32The ECG also wrote the OECD Common Approaches or the Recommendation of the Council on Common Approaches for Officially Supported Export CreditsandEnvironmentalandSocialDueDiligencethatwasalsoadoptedinJune2012.33

TheUKisamemberofOECDandUKEFisamemberofECGmorespecifically,therefore UKEF is obligated to follow these policies and regulations. UKEFexplainsintheirGuidancetoApplicants:ProcessesandFactorsintheUKExport Finance Consideration of Application: ESHRImpacts.InrelationtoESHRimpacts,andconsistentwiththeOECDCommon Approaches,UKExportFinancewillreviewaprojectagainstappropriateinternational standardsdealingwithESHRimpactswhere:(i)theexportcredithasarepaymenttermof 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 isamaterialchangeinoutputorfunctiontoanidentifiableexistingproject;and2 www.oecd.org(iii)wherethetotalamountofUKExportFinancesupportforacontractor contractsisequaltoorgreaterthantheequivalentofSpecialDrawingRights(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.

29 IBID. 30 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. . 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. . 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. . 34 Guidance to Applicants: Processes and Factors in UK Export Finance Consideration of Applications. Publication. UKEF- UK Government, 3 Oct. 2012. Web. 7 Dec. 2013. . 15 ThisiscommitmentisinaccordancewiththeECGCommonApproaches.TheCommon Approachesdocumentisnotspecificallyaboutextractiveindustriesbutconsidersmore broadly the environmental and social impact in the lending sector across various industries.Asnotedabove,ECGmembersarerequiredtocloselymonitorprojectsinCategoryAand release information about these projects to the public.Category A is defined as: aprojectisclassifiedasCategoryAifithasthepotentialtohavesignificantadverse environmental and/or social impacts, which are diverse, irreversible and/or unprecedented. Theseimpactsmayaffectanareabroaderthanthesitesorfacilitiessubjecttophysical works.CategoryA,inprinciple,includesprojectsinsensitivesectorsorlocatedinornear sensitive areas. An illustrative list of Category A projects is set out in Annex I.35AfterreviewingAnnex1regardingCategoryA,theresearchersdeterminedthatextractive 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 industrialminerals,orconstructionmaterials.Itmayalsoincludetheprocessingofthe extractedmaterial.Largescaleoil,gas,orliquefiednaturalgasdevelopmentthatmay includeanyorallof:exploration(seismicanddrilling);fielddevelopmentandproduction activities; transport activities, including pipelines/terminals, pump stations, pigging stations, compressor stations and associated facilities; or gas liquefaction facilities.36 UKEFisrequiredbyECGCommonApproachestoconductanenvironmentalandsocial impactassessmentforallCategoryAprojects,namelytheirextractiveprojects.Theyare 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. AsamemberofECG,UKEFisrequiredtoadoptandimplementthesepoliciesand 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.ItisunclearifandhowtheUKEFisimplementingthesepolicies,theresearcher wasunabletolocatethereportsrequiredforextractiveCategoryAprojects.Additionally giventhatUKEFisgivingfundingandofferinginsurancetocompaniesthatimplement extractiveprojects,theyarenotinthepositiontoconductanESIAoreventopublishthe companyESIAreport.TheimplementationoftheECGpoliciesforCategoryAprojectsin now explicitly described by UKEF and there is no evidence of its implementation. Therearenoclearrequirementsregardingrevenue,paymentandcontractdisclosureat UKEF or ECG.There are a few organizations that have released reports or published articles aboutthelackoftransparencyatUKEF.CleanUpBritainsExportsisawebsitethatuses

35 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. . 36 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. . 16 casestudiesofUKEFprojectstoillustratetheirconcernswiththetransparencyofthe agency.AmnestyInternationalJune2013BriefingcalledAHistoryofNeglect:UKExport Finance and Human Rights is one such report.Amnesty International reports: CivilsocietyorganizationsandparliamentarianshaveraisedconcernsoverUKEFslackof transparencyanddisclosureformanyyears,butsuccessivegovernmentsandUKEFitself haveconsistentlyignoredthem.Asaresult,ahighlevelofmistrustandsuspicionhas developedaroundUKEFspoliciesandpractices.ObtaininginformationfromUKEFisa monumentaltask,andtheagencyshowsnoapparentwillingnesstochange.Thishas consequencesforUKEFsimageanditsstakeholderrelations,andalsoraisespublic accountability issues.37 Asnoted,therehavebeenmanyrequestsmadetoUKEFfortransparencyandtheydo publishinformationaboutindividualprojectstheyarefundingandthecostsassociated withtheseprojects.Theprojectsarenotorganizedorcodedinawaytoassessthetotal amount of revenue or payments in the extractive industry. 3.2.1Accessibility of Information Informationisverydifficulttoaccessandrequiresalotoftimeontheirwebsitetryingto findtherelevantinformationandthenlookingforsecondarysourcesthatfrequently criticized UKEF for their lack of transparency.The researchers traced policies from UKEF to OECDandECGinordertofindpoliciesregardingenvironmentalandsocialimpact assessments but information about revenue disclosure was not found. 3.2.2Enforcement Mechanisms Nopoliciesorproceduresexisttobeenforced.Asnotedinthequoteabovefromthe AmnestyInternationalBriefing,itisverydifficulttoaccessinformationfromUKEFabout how they conduct their business. 3.2.3Dodd-Frank, EU Directives, and IFC Sustainability Framework GiventhatnewUS-EUmandatorydisclosurerulesthroughstockmarketregulations(e.g., Cardin-Lugar)willcoveralargernumberofcompanies,companiesreceivingfundsand insurance from UKEF will be forced to abide by these rules. This will likely indirectly affect UKEF,howeverthedepartmentislargelyaccountabletotheparliamentandtherehave beenminimalchangesmadetoUKEFstransparencyprocedures.Inanotherreportby 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 UKEFlacksclarity,transparencyandaccountability.Asnotedabovetherearecritical questions and problems with their policies andprotocols, they state that they follow OECD CommonApproacheshoweverevidenceofthisandrequiredreportsarenotmadepublic.

37 A History of Neglect UK Export Finance and Human Rights. Rep. Amnesty International, June 2013. Web. . 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. 2013.17 UKEFisamemberofOECDandassuchtheyarealsoheldtothestandardsofIFC 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. 18 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 DEpargneandBanquePopulaire.Cofacehelpscompaniesprotect,fund,controland managetheircommercialdebtthroughtheissuanceofcreditinsurance,factoring,ratings, business information, and debt management. CofacehasalsomanagedguaranteesonbehalfoftheFrenchstate,assistingFrench companies by insuring risks that would be too risky to ensure otherwise. WewillexamineCofacesenvironmentalandsocialcommitmentandtheimplicationsthe commitmenthasonthetransparencyofpaymentandcontractdisclosurefortheirpublic guarantees.InformationgatheredfromsecondarysourcessuchasLesAmisDeLaTerre, Natixis, and ECA Watch will be discussed in a later section. 4.1Background InformationregardingCofacewasprimarilyobtainedthroughonlineresearchanda throughexaminationoftheCofacewebsite.Cofacehasacomplexwebofcountryspecific websites,soCoface.frwasprimarilyusedtofindinformationonitspublic guarantees.The French website was translated into English through Googles online translation tool. Coface representativeswerealsocontactedtogatheradditionalinformation,andsecondary sources were collected and analyzed. 4.1.1Scope and Size of the Problem Since2005,Cofacehasfinanced17projectsintheextractivesector,financingover1.1bn ($1.120bn)intotal(seeappendixAforadescriptionofeachproject).Wetranslatedall disclosedprojectsfromthesecondquarterof2005to2013,andthenreviewedproject descriptions to identify extractive industry projects. Cofacedoesnotadhereto,adoptoragreetoanypolicyorframeworksthatrequirethe recipientsofCofaceguaranteestodisclosepaymentorcontractinformation.Tobespecific, their projects must comply with some international standards but no standards that would requireorsuggestthefirmswhichreceivetheguaranteesmustdisclosepaymentsor contracts. Projects must comply with the IFC Performance Standards, but not the IFC Access to Information Policy specifically. ThedocumentOurEnvironmentalandSocialCommitmentundertheEnvironmentaland SocialEvaluationsectionoftheCofacewebsite,Cofacedisclosestheircontract requirements.ThisframeworkisincompliancewiththeOECDRecommendationon CommonApproaches,whichisadevelopmentofcommonproceduresandprocesses relating to the environmental and social review of officially supported export credits.40

39 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) 19 AccordingtotheOECDRecommendation41,therelevantinternationalstandardsarethose publishedbytheWorldBankGroup(environmentalandsafeguardpolicies)andregional 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 4.1.2Assessments from secondary sources TheCofacewebsiteisarichsourceofinformation,fromcountryrankingsandrisksto economicstudies.However,informationonpublicguarantees,andpaymentandcontract transparency requirements for the recipients of their public guarantees are not included. Areportfrom2009byLesAmisDeLaTerre,2001-2008:WhoBenefitsfromCoface Guaranteesconcludedthatitwasnotpossibletodeterminewhethertheenvironmental proceduresofCofaceareappliedcorrectlyatthattime.42 Wehaveadoptedsomeoftheir recommendations in section 4 of this paper. In addition, we were able to review the issues thatLesAmisDeLaTerreidentifiedin2009,andcomparethemwithCofacescurrent transparency initiatives. Natixis, Cofaces parent company, reported that Coface had seven Oil and Gas Transactions43 thatunderwentEnvironmentalandSocialduediligenceinits2012Annualreport.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. 44According to ECA Watch, Coface partially financed the BTC pipeline and the Jaitapur Nuclear Power Plant through dodgy deals.45 4.2Transparency 4.2.1Payment and Contract DisclosureCofacecomplieswiththeOECDCommonApproaches,whichrequirescompliancewith three specific guidelines: the World Banks Environmental and Social Safeguard Policies; the IFCPerformanceStandards;andtheIFCEnvironmental,Health,andSafetyGuidelines. However,theseguidelinesdonotrequirepaymentandcontractdisclosure,oranyother extractiveindustrydisclosurerequirements.Inthissection,wereviewCofacespolicy frameworks and standards, and discuss the implications for transparency.

41 OECD Common Approaches. Page 9 Section 20. 42 Les Amis De La Terre. 2001-2008: Who benefits from Coface guarantees, 43 Natixis Annual Report. Page 48 44 ECA WATCH. Last accessed 12/8/13) 45 ECA WATCH. Last accessed 12/8/2013 20 In Cofaces Environmental and Social Commitment document, the general points listed are in compliance with the OECD Common Approaches framework: Cofacecarriesoutasystematicenvironmentalassessmentofallmajorcredit-insurance projects managed on behalf of French state when the French share is above 10 millions or whenlocatedinornearasensitivearea.Theseprojectsmustcomplywiththelocal environmental laws, and the relevant international standards such as the World Bank Group [standards].46 These international standards include:TheWorldBank'senvironmentalandsocialsafeguardpolicies, 47 whichprovide guidelinesforbankandborrowerstaffintheidentification,preparation,and implementation of programs and projects. TheIFC'sPerformanceStandards,48 whichdefineprivatestakeholdersrolesand responsibilities for managing their projects and the requirements for receiving and retaining IFC support. TheIFCEnvironmental,HealthandSafetyGuidelines, 49whichincludetechnical referencedocumentswithgeneralandindustry-specificexamplesofGood International Industry Practice (GIIP). CofacesenvironmentalandsocialcommitmentisuptothestandardofOECDCommon Approaches:50 CofaceachievesitsenvironmentalandsocialanalysisinaccordancewiththeOECD Recommendation on Common Approaches for export credits benefiting from public support and have social andenvironmental due diligence.Theyare intended to ensure thatprojects meet the relevant local regulations of the host country and relevant international standards, primarily those developed by the World Bank and the IFC.51 Thecompaniesthatreceivetheirpublicguaranteesarenotrequiredtodisclosepayments or contracts made to governments because they do not have in place a framework requiring thisand/ordonotadhere,adoptoragreetoanyframeworksthatrequirethistypeof disclosure.TheWorldBanksEnvironmentalandSocialSafeguardPolicies,theIFCs PerformanceStandardsandtheIFCEnvironmental,HealthandSafetyGuidelinesdonot requirepaymentorcontractdisclosure,nordotheyhaveanyrequirementsinregardsto the extractive industry.

46 Our Environmental and Social Commitment; pdf download. Section General 1 OECD Framework 47 World Bank Environmental and Social Safeguard policies 48 IFCs Performance Standards. 49 The IFC Environmental,Health and Safety Guidelines.