US, Russian Environmental Groups Blast Fischer For Failure To Reform Hermes

Ten United States environmental groups with over a million members expressed their “deep concern” in a letter today to German Vice Chancellor Joschka Fischer over the German government’s failure to carry out its commitment to promote environmental and social reforms of of Hermes, Germany’s export credit agency. Six Russian environmental organizations also endorsed the letter. Hermes is a major guarantor of projects in the former Soviet Union. This week, Hermes marks its 50th year of government export promotion. The Green and Social Democrat Parties pledged far-reaching reforms of German export promotion practices in the Coalition Agreement they issued following their victory in last year’s national elections. Fischer, a leader of the Green Party and Foreign Minister, has direct responsibility for Hermes reform as head of the Foreign Ministry, which, with three other ministries, oversees Hermes operations in an Inter-Ministerial Committee for export promotion.

The environmental groups call Fischer’s “assent and lack of responsible intervention” in the approval on October 12 of a $53 million dollar guarantee for the Three Gorges Dam in China “astounding and indefensible.” “This is a project that the World Bank did not support, and which the US Export-Import Bank refused to finance on environmental grounds,” notes the letter. “Earlier Hermes guarantees granted by the previous government for Three Gorges were condemned by a parliamentary motion of the Green Party with the support of many Social Democrat parliamentarians.”

The letter describes proposed Hermes export guarantees the Inter-Ministerial Committee is considering that will damage the environment and undermine international attempts to promote “minimal standards of environmental and social responsibility among export finance agencies worldwide.” Projects being considered for guarantees include the Ilisu dam on the Tigris River in Turkey, the Maheshwar dam on the Narmada River in India, and the completion of two nuclear power plants in Ukraine.

“The German Foreign Ministry and your personal voice have been conspicuously absent in giving any support for efforts of German civil society, members of your own party, and other elements of the Coalition government to withhold approval of the use of German taxpayer guarantees for this series of environmentally, socially and economically scandalous investments,” the letter states. “Yours is the only ministry in the current German government where leading officials have refused to meet with representatives of German non-governmental organizations to discuss these issues.”

The letter underscores that “Germany shares major responsibility for the lack of substantive progress on common environmental guidelines in discussions among export credit agencies in the OECD, despite a mandate from the 1999 Cologne G8 Summit for Hermes and other G8 export finance agencies to develop such guidelines.”