Discrediting Britain

Nick Dearden explains how the Export Credits Guarantee Department puts corporate profits above human rights

May 2, 2011
4 min read


Nick DeardenNick Dearden is the director of UK campaigning organisation Global Justice Now. He was previously the director of Jubilee Debt Campaign

In December 2006, a little-known government department became part of a national scandal when Tony Blair told the Serious Fraud Office to drop a corruption investigation into how a British arms company secured a massive Saudi Arabian arms deal in the 1980s. The controversial deal had been insured by the British government through the Export Credits Guarantee Department (ECGD).

Opposition MP Vince Cable said at the time that the decision to drop the case ‘undermined the rule of law and Britain’s reputation’ and made a mockery of Gordon Brown’s fondness for lecturing the developing world on corruption.

Vince Cable is now in charge of the ECGD, answerable as it is to the Department for Business, Innovation and Skills. To date, little has been announced by way of reform.

The ECGD exists to support British exports by providing them with a sort of insurance. It normally supports large companies involved in big projects in the developing world. Over the past 10 years, support for fossil fuels, arms sales and aerospace has accounted for around 75 per cent of its work. Last year one single company, Airbus, received 89 per cent of ECGD support.

From arms sales to dictators through oil and gas pipelines to mega-dams, the ECGD has backed projects that have been implicated in corruption, environmental destruction and human rights abuses. Even worse, when deals go wrong, it is often the developing country that ends up in debt. The ECGD pays out on the ‘insurance’ claim from the British public purse, and the amount paid becomes a debt of the country where the project took place. Today, developing countries owe £2 billion of debt to the ECGD and have repaid £2.9 billion since 2005.

To really get to grips with the problem with the ECGD, you only need to look at some of its past projects. Indonesia currently ‘owes’ it more than £500 million, most of which accrued from the sale of British weapons to the brutal General Suharto in the 1980s and 1990s.

Suharto killed between 500,000 and a million people during his first year in office and conducted a 24-year occupation of East Timor. From 1994, he bought half of his military equipment from the UK, supported by the ECGD. Some of these weapons, including Hawk aircraft, Scorpion tanks and water cannons, were seen in use against civilians, including during the attack on Aceh. Yet the current Indonesian government is still paying for these tools of repression.

As fossil fuels become more difficult to access, export credits are again being used to protect ‘British interests’ throughout the world. That’s why the ECGD supported the Baku-Tbilisi-Ceyhan oil pipeline connecting the Azeri oil field in the Caspian Sea to the Mediterranean, passing through Azerbaijan, Georgia and Turkey.

Building the pipeline included arranging a series of controversial agreements between oil companies and the countries involved, which gave those companies special legal status. In essence, the agreements took priority over all national laws except the constitution, and prevented any new laws, including improvements in environmental or human rights laws, from affecting the companies’ profits. Amnesty International argues that these agreements ‘effectively create a “rights-free corridor” for the pipeline’.

Then there’s the hydro-electric power station in Kenya that cost four times what it should have done and produced only a fraction of the power promised. The Kenyan press called it ‘a stinking scandal’. The government is still paying.

In a recession, export credits are presented as a key way for the British government to support struggling industry and stimulate the economy. But what sort of economy is the ECGD promoting? It could help useful innovation. It could help create jobs in renewable energy sectors. But there isn’t much chance of that when it does not even have a policy on climate change.

While campaigners have given the ECGD a relatively easy ride in recent years, business lobbyists have been pushing back on the already poor standards that do exist. Early in 2010, the Labour government watered ECGD standards down. Smaller investments will no longer be screened for any sort of social or environmental impact – even on issues as significant as child labour and forced labour.

So ‘British interests’ are supported at the expense of human rights abuses, environmental destruction and corruption. If we want to avoid another generation of reckless projects and toxic debts, we need to challenge the ECGD now.

Read a new report and join the campaign at www.jubileedebtcampaign.org.uk/dodgydeals


Nick DeardenNick Dearden is the director of UK campaigning organisation Global Justice Now. He was previously the director of Jubilee Debt Campaign


✹ Try our new pay-as-you-feel subscription — you choose how much to pay.

Civic strike paralyses Colombia’s principle pacific port
An alliance of community organisations are fighting ’to live with dignity’ in the face of military repression. Patrick Kane and Seb Ordoñez report.

Greece’s heavy load
While the UK left is divided over how to respond to Brexit, the people of Greece continue to groan under the burden of EU-backed austerity. Jane Shallice reports

On the narcissism of small differences
In an interview with the TNI's Nick Buxton, social scientist and activist Susan George reflects on the French Presidential Elections.

Why Corbyn’s ‘unpopularity’ is exaggerated: Polls show he’s more popular than most other parties’ leaders – and on the up
Headlines about Jeremy Corbyn’s poor approval ratings in polls don’t tell the whole story, writes Alex Nunns

The media wants to demoralise Corbyn’s supporters – don’t let them succeed
Michael Calderbank looks at the results of yesterday's local elections

In light of Dunkirk: What have we learned from the (lack of) response in Calais?
Amy Corcoran and Sam Walton ask who helps refugees when it matters – and who stands on the sidelines

Osborne’s first day at work – activists to pulp Evening Standards for renewable energy
This isn’t just a stunt. A new worker’s cooperative is set to employ people on a real living wage in a recycling scheme that is heavily trolling George Osborne. Jenny Nelson writes

Red Pepper’s race section: open editorial meeting 24 May
On May 24th, we’ll be holding the third of Red Pepper’s Race Section Open Editorial Meetings.

Our activism will be intersectional, or it will be bullshit…
Reflecting on a year in the environmental and anti-racist movements, Plane Stupid activist, Ali Tamlit, calls for a renewed focus on the dangers of power and privilege and the means to overcome them.

West Yorkshire calls for devolution of politics
When communities feel that power is exercised by a remote elite, anger and alienation will grow. But genuine regional democracy offers a positive alternative, argue the Same Skies Collective

How to resist the exploitation of digital gig workers
For the first time in history, we have a mass migration of labour without an actual migration of workers. Mark Graham and Alex Wood explore the consequences

The Digital Liberties cross-party campaign
Access to the internet should be considered as vital as access to power and water writes Sophia Drakopoulou

#AndABlackWomanAtThat – part III: a discussion of power and privilege
In the final article of a three-part series, Sheri Carr gives a few pointers on how to be a good ally

Event: Take Back Control Croydon
Ken Loach, Dawn Foster & Soweto Kinch to speak in Croydon at the first event of a UK-wide series organised by The World Transformed and local activists

Red Pepper’s race section: open editorial meeting 19 April
On April 19th, we’ll be holding the second of Red Pepper’s Race Section Open Editorial Meetings.

Changing our attitude to Climate Change
Paul Allen of the Centre for Alternative Technology spells out what we need to do to break through the inaction over climate change

Introducing Trump’s Inner Circle
Donald Trump’s key allies are as alarming as the man himself

#AndABlackWomanAtThat – part II: a discussion of power and privilege
In the second article of a three-part series, Sheri Carr reflects on the silencing of black women and the flaws in safe spaces

Joint statement on George Osborne’s appointment to the Evening Standard
'We have come together to denounce this brazen conflict of interest and to champion the growing need for independent, truthful and representative media'

Confronting Brexit
Paul O’Connell and Michael Calderbank consider the conditions that led to the Brexit vote, and how the left in Britain should respond

On the right side of history: an interview with Mijente
Marienna Pope-Weidemann speaks to Reyna Wences, co-founder of Mijente, a radical Latinx and Chincanx organising network

Disrupting the City of London Corporation elections
The City of London Corporation is one of the most secretive and least understood institutions in the world, writes Luke Walter

#AndABlackWomanAtThat: a discussion of power and privilege
In the first article of a three-part series, Sheri Carr reflects on the oppression of her early life and how we must fight it, even in our own movement

Corbyn understands the needs of our communities
Ian Hodson reflects on the Copeland by-election and explains why Corbyn has the full support of The Bakers Food and Allied Workers Union

Red Pepper’s race section: open editorial meeting 15 March
On 15 March, we’ll be holding the first of Red Pepper’s Race Section open editorial meetings.

Social Workers Without Borders
Jenny Nelson speaks to Lauren Wroe about a group combining activism and social work with refugees

Growing up married
Laura Nicholson interviews Dr Eylem Atakav about her new film, Growing Up Married, which tells the stories of Turkey’s child brides

The Migrant Connections Festival: solidarity needs meaningful relationships
On March 4 & 5 Bethnal Green will host a migrant-led festival fostering community and solidarity for people of all backgrounds, writes Sohail Jannesari

Reclaiming Holloway Homes
The government is closing old, inner-city jails. Rebecca Roberts looks at what happens next

Intensification of state violence in the Kurdish provinces of Turkey
Oppression increases in the run up to Turkey’s constitutional referendum, writes Mehmet Ugur from Academics for Peace


6