Exporting Destruction: Export Credits, Illegal Logging and Deforestation

Exporting Destruction: Export Credits, Illegal Logging and Deforestation

Government-subsidized loans to corporations doing business in timber-producing countries are financing global deforestation, a new report from FERN finds. According to Exporting Destruction: Export Credits, Illegal Logging and Deforestation (41 pages, PDF), export credit agencies (ECAs), which provide loans, guarantees, and risk insurance for export businesses in countries considered risky, have given significant support to the pulp and paper sector as well as for infrastructure projects. Case studies show that such support has led to an increase in illegal logging, corruption, and the opening of isolated forests, especially in Indonesia, and that ECAs have no procedure for identifying and addressing such practices. The authors call for reducing ECAs' potential social and environmental damage by demanding accountability and for coordinating trade promotion policies with a sustainable development agenda. The study was funded by the Charles Stewart Mott Foundation, the UK Department for International Development, the Dutch Ministry of Agriculture, Nature and Food Quality, and the Swedish International Biodiversity Program.