The impact of exports on the environment and social environment

Principle of sustainable development requires reduction of negative impact of human economic activities on environment and social environment. Review of environmental and social environment effects of the export and investment is a standard procedure in a majority of developed countries and it is one of basic conditions for the financing of export projects for institutions from the World Bank Group, development agencies and regional development banks.

"The Recommendation of OECD (Organisation for Economic Co-operation and Development) on common approaches to environment and state supported export credits ", which includes the commitment of all member countries not to support environmentally unfriendly projects through their bodies, became effective on 1 January 2004. In April 2016 OECD Council adopted a revised Recommendation of common approaches for officially supported export credits and environmental and social due diligence ("common approaches"), which extends and reinforces the original stipulation on environmental and social aspects of officially supported exports. The new Recommendation defines clearer and more comprehensive process of project categorisation from the aspect of their impact on environment and social environment. The main change is the reinforcement of attention paid to social impacts of projects and further aspects affecting human rights in the project implementation countries.

All EGAP's procedures are in compliance with international rules in the area of environment protection, including the revised Recommendation of the OECD Council of 2016. Review of environmental impact in the country of final destination is one of the basic conditions in insurance of export and investment; an expert opinion (ESIA - Environmental and Social Impact Assessment) has to be prepared for a project where a significant negative impact on environment, social aspects or human rights can be expected. EGAP’s approach to the process of examination of an application for insurance is efficient and avoids burdening clients with out-of proportion expenses.

Environmental and social environment review shall be made for all projects where the Exporter applied for insurance of a credit with state support with repayment exceeding 2 years as well as for all investment in foreign countries. Responsibility for environment and social environment compatibility of the project always remains on the main supplier. As long as the Czech exporter is in position of a subcontractor, the submission of a review prepared for the main supplier is sufficient.

The insured has an obligation to inform public in cooperation with EGAP on impact of the export on environment and social environment while respecting trade secrets, intellectual and industrial property and know-how.

© EGAP  2017
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