Export credit guarantees,
The ESHR review follows the provisions laid out in the OECD Common Approaches on the Environment and Officially Supported Export Credits which require the identification, assessment and mitigation of human rights risks in line with the UN Guiding Principles. Where there is a high likelihood of severe project-related human rights impacts, the Federal Government can require specific Human Rights Due Diligence Reports. All applications for cover outside the scope of the Common Approaches are screened for human rights risks as part of the so-called Watchful Eye approach.
Untied loan guarantees
Although the Common Approaches do not formally apply to untied loan guarantees, their screening, categorisation and assessment follows the provisions of the Common Approaches.
The due diligence process for investment guarantees refers to the OECD Common Approaches and follows additional provisions from international business and human rights principles and the German National Action Plan (NAP) on Business and Human Rights. Projects with material ESHR risks are subject to a comprehensive review which includes benchmarking the projects against the International Finance Corporation Environmental and Social Performance Standards Performance as well as the applicable World Bank Group/IFC EHS Guidelines.
For all three schemes: if human right risks are identified, and the risks are found to be too severe and unmitigable, a guarantee will not be granted or a condition may be added to the guarantee obliging the policy holder to mitigate and/or remediate the identified risks. In such a case, the policy holder’s compliance with the guarantee condition and the applicable standards will be monitored. If an obligation is not complied with, the Federal Government can as a measure of last resort withdraw the cover.
Applicants for cover can access information on the ESHR review process, the applicable standards and the special role of human rights aspects on the official websites of the Foreign Trade and Investment Promotion Scheme. In addition, they are provided with guidance on human rights aspects through webinars, workshops, questionnaires and transaction-specific communication.
Three interministerial committees headed by the Federal Ministry of Economics and Energy and including the Federal Ministry of Finance, the German Foreign Office and the Federal Ministry for Economic Cooperation and Development are responsible for deciding on the applications for cover. The participation of the four ministries in the committees aims to ensure coherence between their departmental policies and the export trade and promotion scheme regarding business and human rights.