HC Deb 07 February 2001 vol 362 cc560-2W
Mr. Gale

To ask the Secretary of State for Trade and Industry what plans he has for the future of the Export Credits Guarantee Department; and if he will make a statement. [148384]

Mr. Byers

[holding answer 5 February 2001]: I presented to the House on 25 July 2000, Official Report, columns 520–21W, the report of ECGD's Mission and Status Review. This report set out changes to ECGD's Mission, and set out an important agenda for change. ECGD is incorporating the conclusions of the Review into its strategic planning process and into corresponding change initiatives that will be implemented over the next three years.

ECGD is on course to deliver, by 1 April 2001, the key principles of a capital framework to enhance its risk management systems.

Dr. Cable

To ask the Secretary of State for Trade and Industry if he will inquire into the circumstances under which the ECGD provided credit cover to a hotel project in Ghana involving the Bank of Scotland and International Generics; and what steps have been taken by the ECGD to ensure that the funds were used for the purposes for which they were intended. [148829]

Mr. Byers

[holding answer 5 February 2001]: ECGD provided export credit cover for this project in 1994 following a request from the Ghanaian Ministry of Finance for such support.

The Loan Agreement required that disbursements to the UK supplier, International Generics Ltd., would only be made against qualifying certificates in the form specified by the Loan Agreement, which were signed by the supplier's authorised signatory and accompanied by a supporting certificate from the architect for the relevant project. ECGD has since carried out extensive inquiries into this project, the results of which were passed to the DTI Companies Investigation Branch and the Serious Fraud Office (SFO). The DTI and SFO informed ECGD that they did not consider these cases suitable for investigation owing to the difficulty in finding a criminal offence that had occurred within UK jurisdiction, which they could investigate and prosecute.

However, if the Ghanaian authorities undertake an investigation into whether any illegal activity has taken place, ECGD/DTI/SFO will co-operate with them in any way possible.

Dr. Cable

To ask the Secretary of State for Trade and Industry on what basis the ECGD considered International Generics to be a suitable beneficiary of export credit cover in 1994; and when they ceased to be considered suitable. [148828]

Mr. Byers

[holding answer 5 February 2001]: As an organisation carrying on business in the UK, supplying UK goods and services to organisations carrying on business outside the UK, International Generics were eligible, under the provisions of the Export and Investment Guarantees Act 1991, for ECGD cover in 1994. Under the Statement of Business Principles announced at the beginning of this year, ECGD will not only look at the payment risks, but also make thorough inquiries into the underlying quality of the projects, including their environmental, social and development impacts, put forward by International Generics (or indeed any other exporter) before committing cover.

Dr. Cable

To ask the Secretary of State for Trade and Industry for what reason the ECGD accepted a sovereign guarantee from the Bank of Ghana in 1994 against the advice of the IMF and World bank. [148830]

Mr. Byers

[holding answer 5 February 2001]: Neither the IMF nor the World bank gave ECGD any advice regarding the acceptance of Ghanaian sovereign guarantees. However, in providing guarantees, ECGD always sought, and received, assurances from the Ghanaian government that ECGD-backed borrowing was consistent with their agreements with the IMF. Indeed, there was no non-concessional borrowing limit in Ghana's agreement with the IMF until 1997.

Dr. Cable

To ask the Secretary of State for Trade and Industry how many projects supported by the ECGD in the last 10 years have been subsequently discovered to have involved the misdirection of funds to purposes different from those approved by ECGD; and in which countries this occurred. [148831]

Mr. Byers

[holding answer 5 February 2001]: There are no examples of proven cases involving the misdirection of funds to purposes different from those approved by ECGD.