Monday, March 20

Canadian Press
Monday, March 20, 2000

Ottawa -- The federal Export Development Corp. is using secret loans -- and billions in taxpayer dollars -- to underwrite foreign megaprojects that are plundering the planet, leading environmental experts say.

"They have no rules. They will do anything. They go where others fear to tread," said Patricia Adams, an economist, author and executive director of environmental watchdog Probe International in Toronto.

The target she attacks most fiercely, among dozens, is the world's largest power dam, now under construction in China.

"Three Gorges is the worst example. All the other export credit agencies were staying away until Jean Chrétien told the EDC to go ahead. After that, they jumped in."

Ms. Adams, along with environmentalists in Ottawa, Washington and China, have condemned Three Gorges as a corruption-ridden financial fiasco involving the forced relocation of 1.3 million Chinese. The dam will flood rich river lowlands and create a reservoir longer than Lake Superior.

The World Bank and two U.S. counterparts of the EDC have refused to fund it. But the EDC has committed $170-million to support two Canadian companies supplying power station equipment such as turbines, generators and computers. Both General Electric Canada Inc. and SNC-Lavalin Group Inc. gave major donations to the federal Liberal Party.

Between 1992 and 1998, General Electric gave $66,730 to the Liberals. SNC-Lavalin, which is providing computers to the Three Gorges project, donated $295,817 for the same period.

"We are a participant, as is Germany, Japan, France, Austria," said EDC vice-president Eric Siegel who has visited the site.

"The Chinese made a determination that they were going to build Three Gorges. . . . The Yangtze River has routinely flooded, with the loss of hundreds of thousands of lives. So the Chinese have looked at all the risks and determined that the project was, overall, beneficial and environmentally acceptable. We reviewed that before making our decision."

Jon Sohn, a Washington lawyer and former official with Overseas Private Investment Corp., a U.S. federal export agency, says Canada's EDC is among the most environmentally reckless of all export credit agencies in the developed G7 countries.

"The EDC is undercutting internationally recognized standards," Mr. Sohn said.

"In the short term, that might provide a competitive advantage. But this is a race to the bottom. When you have projects that are beyond the lines of sustainable development, like Three Gorges, that's not going to meet OPIC or World Bank standards."

The EDC investment in Three Gorges is only a fraction of the billions of dollars the federal agency spends to help finance new mines, pulp mills, power dams and fossil-fuel projects in every part of the globe. The loans, guarantees and credit insurance come with one main condition: Canadian companies get a piece of the action.

In China alone, the EDC has loaned $1.5-billion to build two Candu nuclear reactors. Only weeks after the bloody Tiananmen Square massacre in 1989, the EDC loaned the Chinese government $130-million to build another massive hydro project in a remote province.

Dozens of other projects are making Canada a dirty word internationally, and more EDC-financed megaprojects are under construction or planned.

They include: a Candu reactor ($1.5-billion loan) and five more hydro dams in Turkey ($1-billion); the Antimina copper mine in Peru ($285-million EDC loan); smelters from Indonesia to Chile; power plants from Pakistan to Latin America; hydro dams in India; a gold mine in Tanzania; and oil-extraction projects across the globe.