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Productivity Commission Hearing puts a spotlight on the operation of Australia’s Export Credit Agency

Tuesday 27 March, 2012

Yesterday Jubilee Australia’s deputy director gave testimony to a Productivity Commission hearing about the impact of Australia’s export credit operations on less-developed nations, including the accumulation of excessive sovereign debt. The Productivity Commission’s Draft Report, released last month, incorporates key Jubilee Australia’s recommendations, including proposing new measures to address public concern about allegations of bribery and malfeasance by Export Finance and Insurance Corporation (EFIC) client companies. Jubilee believes those most affected by such improper business practices are poverty-ridden communities overseas.

Australia’s Export Finance and Insurance Corporation needs urgent reforms to address the agency’s legislative exclusion from the Freedom of Information Act and lack of transparency, says Australian civil society organisation, Jubilee Australia. These views were presented by directly to the Productivity Commission hearing in Sydney yesterday.

Carmelan Polce, deputy director of Jubilee Australia, said:  “Jubilee Australia has endorsed the challenges put to EFIC by the Productivity Commission in its draft report, especially the absence of early advice to the Government and the public about prospective transactions that carry a high risk of environmental and social impacts.  The Government needs to take urgent action to improve the transparency of EFIC’s activities to the Minister for Trade, the Australian Government and the public.”

The inquiry into the Australia’s export credit arrangements follows Jubilee Australia’s 2009 report, “Risky Business” which profiled, among other things, the fatal conflicts and community unrest related to the Exxon Mobile LNG project in PNG.

Ms Polce said: “EFIC agreed to provide up to $US500 million to the Exxon Mobil-led PNG LNG project, 80 per cent of it allocated out of the National Interest Account which is managed at the complete discretion of the Trade Minister.  This project carries excessive risk to the PNG people yet the decision to provide EFIC support was not open for debate even by elected members of the Federal Parliament”.

The “Risky Business” report helped to draw attention to the shadowy practices of EFIC and give rise to the Productivity Commission inquiry into Australian export credit arrangements.

The Commission is expected to deliver its final report to the Government in May at which time Jubilee Australia expects to release its new report on the PNG LNG Project, “Pipe Dreams”.

“Expanding Australian Federal Police investigations into allegations of bribery by two of EFIC’s large, long-standing client companies have confirmed that a thorough consideration of Australian export credit arrangements was needed,” said Ms Polce.

Visit the Productivity Commission website to read Jubilee Australia’s submissions: Submission (November 2011) and Post Draft Report Submission (March 2012)

To learn more about Jubilee Australia’s work, including current research projects and campaigning initiatives, visit our website: www.jubileeaustralia.org

Jubilee Australia is an independent non-profit research and advocacy organisation established in 2001. Its work draws attention to the policies of government and practices of business that impede the alleviation of long term poverty, particularly in the Asia Pacific. Jubilee Australia has been advocating for reforms to Australian export credit policy for more than eight years.

Level 7, 379 Kent Street, Sydney NSW / +61 2 8259 0817 / www.jubileeaustralia.org

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