Export projects now must be reviewed for environmental impact

Consulting engineers who do business overseas with the support of Export Development Canada will find that the ground rules are soon changed. EDC provides financial backing and risk insurance worth millions of dollars on projects done by Canadian corporations working overseas. While the crown corporation has always done some environmental monitoring of projects, legislation was passed in the Canadian Parliament at the end of 2001 which makes it law that EDC reviews the environmental impact of projects it supports before making any official transaction. The Act to amend the Export Credit Corporation also changed its name from Export Development Corporation to Export Development Canada.
The rules governing EDC follow a report by the Auditor General which found shortfalls in the way the corporation operates. Some non-governmental organizations have also been very vocal in their opposition to EDC’s sponsorship of megaprojects in developing countries. Pollution Probe, a Toronto-based organization, criticizes the use of Canadian taxpayer money to financially support projects such as large hydro-electric dams, gold mines and nuclear power plants which they claim often cause wide-scale social and environmental harm.
Large consulting engineering firms like SNC-Lavalin were alarmed when they heard about the proposed legislation and submitted objections to EDC. In particular they worried about EDC disclosing details about projects to the public, including financial information. The consulting engineering firms felt such disclosure would not be acceptable to many foreign clients and that if it were done before a project was approved, it would make them open to competition from international firms.
Following the passage of Bill C-31, EDC is now working out the details of how its procedures will actually change. It has issued a proposed Environmental Review Directive that establishes methods for reviewing, categorizing and monitoring projects. Under these proposals, where a Canadian company is seeking EDC help for an overseas project that shows significant environmental risk (there are three categories), EDC is obliged to announce publicly on its website that it is considering giving financial support at least 45 days before it signs a transaction. It will also require the project sponsor to make environmental assessment information on the project available to the public for the same period. EDC will be inviting comments for 60 days on these new proposals.
For its part, Pollution Probe, is highly critical of the new law and doesn’t feel it goes near far enough. The organization questions why project sponsors (which include consulting firms) should be allowed to conduct their own environmental review of a proposed project, rather than having a third-party objective review. They also feel that EDC should be subject to the Access to Information Act, so that all projects receiving EDC support are entirely open to public scrutiny.