Risk Managers or Risk Promoters? The impact of export credit and investment insurance agencies on human development and human rights

Sant'Ana, Mattias
(2013) Foreign Direct Investment and Human development. The Law and Economics of International Trade Agreements — ISBN: [978-0-415-53548-9], 350, published

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Export credit and investment insurance agencies provide investors and exporters with loans, insurance and guarantees against risks incurred in international trade and investment activities. Their role is to complement private actors in the lending and insurance markets, and they have been subject to international disciplines in order to avoid that their intervention distorts trade and leads to competitive subsidization. Though justified in terms of improving positive externalities in the exporting country, these agencies were generally indifferent to the negative externalities that their activities could produce in foreign territories. Since the mid-1990s, however, these concerns have started to be integrated into project finance supported by ECAs. This contribution assesses the manner in which this evolution squares with the requirement, under international law, that states should cooperate to promote development, and that they should take appropriate measures to avoid negative human rights impacts of the activities they support abroad. Besides proposing that additional standards be integrated in ECA lending and insurance practice, it suggests that establishing procedural requirements, such as impact assessments, can be particularly useful by moving the debate from resignation with uncertainty, towards a commitment to formulate expectations, perceptions of risk and mitigation policies publicly and prior to any intervention.
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Sant’Ana, M. (2013). Risk Managers or Risk Promoters? The impact of export credit and investment insurance agencies on human development and human rights. In De Schutter, O., Swinnen, J., Wouters, J. (ed.), Foreign Direct Investment and Human development. The Law and Economics of International Trade Agreements (p. 350). Routledge. https://hdl.handle.net/2078.5/32883