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.

Utopia: Work less play more
A shorter working week would benefit everyone, writes Madeleine Ellis-Petersen

Short story: Syrenka
A short story by Kirsten Irving

Utopia: Industrial Workers Taking the Wheel
Hilary Wainwright reflects on an attempt by British workers to produce a democratically determined alternative plan for their industry – and its lessons for today

Mum’s Colombian mine protest comes to London
Anne Harris reports on one woman’s fight against a multinational coal giant

Bike courier Maggie Dewhurst takes on the gig economy… and wins
We spoke to Mags about why she’s ‘biting the hand that feeds her’

Utopia: Daring to dream
Imagining a better world is the first step towards creating one. Ruth Potts introduces our special utopian issue

Utopia: Room for all
Nadhira Halim and Andy Edwards report on the range of creative responses to the housing crisis that are providing secure, affordable housing across the UK

A better Brexit
The left should not tail-end the establishment Bremoaners, argues Michael Calderbank

News from movements around the world
Compiled by James O’Nions

Podemos: In the Name of the People
'The emergence as a potential party of government is testament both to the richness of Spanish radical culture and the inventiveness of activists such as Errejón' - Jacob Mukherjee reviews Errejón and Mouffe's latest release

Survival Shake! – creative ways to resist the system
Social justice campaigner Sakina Sheikh describes a project to embolden young people through the arts

‘We don’t want to be an afterthought’: inside Momentum Kids
If Momentum is going to meet the challenge of being fully inclusive, a space must be provided for parents, mothers, carers, grandparents and children, write Jessie Hoskin and Natasha Josette

The Kurdish revolution – a report from Rojava
Peter Loo is supporting revolutionary social change in Northern Syria.

How to make your own media
Lorna Stephenson and Adam Cantwell-Corn on running a local media co-op

Book Review: The EU: an Obituary
Tim Holmes takes a look at John Gillingham's polemical history of the EU

Book Review: The End of Jewish Modernity
Author Daniel Lazar reviews Enzo Traverso's The End of Jewish Modernity

Lesbians and Gays Support the Migrants
Ida-Sofie Picard introduces Lesbians and Gays Support the Migrants – as told to Jenny Nelson

Book review: Angry White People: Coming Face to Face With the British Far-Right
Hilary Aked gets close up with the British far right in Hsiao-Hung Pai's latest release

University should not be a debt factory
Sheldon Ridley spoke to students taking part in their first national demonstration.

Book Review: The Day the Music Died – a Memoir
Sheila Rowbotham reviews the memoirs of BBC director and producer, Tony Garnett.

Power Games: A Political History
Malcolm Maclean reviews Jules Boykoff's Power Games: A Political History

Book Review: Sex, Needs and Queer Culture: from liberation to the post-gay
Aiming to re-evaluate the radicalism and efficacy of queer counterculture and rebellion - April Park takes us through David Alderson's new work.

A book review every day until Christmas at Red Pepper
Red Pepper will be publishing a new book review each day until Christmas

Book Review: Corbyn: The Strange Rebirth of Radical Politics
'In spite of the odds Corbyn is still standing' - Alex Doherty reviews Seymour's analysis of the rise of Corbyn

From #BlackLivesMatter to Black Liberation
'A small manifesto for black liberation through socialist revolution' - Graham Campbell reviews Keeanga-Yamahtta Taylor's 'From #BlackLivesMatter to Black Liberation'

The Fashion Revolution: Turn to the left
Bryony Moore profiles Stitched Up, a non-profit group reimagining the future of fashion

The abolition of Art History A-Level will exacerbate social inequality
This is a massive blow to the rights of ordinary kids to have the same opportunities as their more privileged peers. Danielle Child reports.

Mass civil disobedience in Sudan
A three-day general strike has brought Sudan to a stand still as people mobilise against the government and inequality. Jenny Nelson writes.

Mustang film review: Three fingers to Erdogan
Laura Nicholson reviews Mustang, Deniz Gamze Erguven’s unashamedly feminist film critique of Turkey’s creeping conservatism

What if the workers were in control?
Hilary Wainwright reflects on an attempt by British workers to produce a democratically determined alternative plan for their industry


6