The year started with new procedures in place for combating corruption more effectively in guaranteed transactions. During the year, EKN revised both its environmental policy, and its policy for combating unproductive expenditure in poor heavily indebted countries.

During the year, the work on revising the OECD joint environmental guidelines, known as the “Common Approaches”, was completed, and EKN has incorporated the changes in its environmental policy. This means that all the World Bank’s Safeguard Policies now govern EKN’s environmental assessments, that closely related business operations are included in the environmental assessment of a project, and that the policy has been expanded to cover more than only export projects.

In environmental issues, we have continued to maintain an ongoing dialogue with non-governmental organisations, exporters and banks.

Cleantech companies

During the year, we noted an increase in demand for guarantees from companies in the cleantech sector. Working jointly with SEK, the Swedish Trade Council, ALMI, Swentec and Swedfund, we started collaborating on meeting cleantech companies for briefings and consultations about the services that could be offered to these companies now and in the future.

Environmental classification

EKN classifies all medium and long-term export transactions in the categories A, B, or C, depending on the presumed environmental consequences of the project. Category A signifies a potential major risk of a negative impact on the environment, B a lesser, C a minimal or no impact of the environment.

The majority of transactions with medium- and long-term credit periods that we guaranteed during the business year fell into the C category – in other words they were judged to have minimal or no environmental impact.
In addition to the guaranteed transactions reported in the table, we deal with environmental issues in many cases which may lead to future transactions or may be cancelled.

Combating corruption

EKN’s efforts against corruption are intended to prevent us from getting involved in corrupt transactions.

The following four aspects in the OECD guidelines were implemented in EKN’s rules and procedures at the turn of the year 2006 / 2007:

• the exporter is now required to disclose information about any prosecutions or convictions for corruption.
• the exporter must also disclose information about agents and agent commission.
• EKN is under a duty to disclose information to prosecutors and to stop any new guarantees in the event of credible proof of corruption. In the event of any legal judgements, EKN can stop payments and reclaim amounts paid out.
• anyone seeking a guarantee from EKN must state whether the company is included it in any of the public lists of blacklisted companies maintained by the World Bank Group or by the EBRD (European Bank for Reconstruction and Development).

EKN had had discussions with exporting companies about the risks of corruption, and has in some transactions required supplementary information about what costs are covered by any agent commission.

Heavily Indebted Poor Countries

Ever since 2002, EKN has had a policy on unproductive expenditure in Heavily Indebted Poor Countries (HIPC), based on an agreement in principle in the OECD. The objective is to restrain State borrowing or State guarantees for loans on commercial terms for investments that are not commercially viable. EKN’s policy is that EKN will not participate by guaranteeing credits if:

• the country has set limits to commercial borrowing,
• the project or investment is not commercially sound,
• the project violates the country’s poverty reduction or debt strategy, or
• the project exacerbates the country’s social and/or economic development.

The policy was revised during 2007 and now covers all so-called IDA-only countries, namely the countries that fulfil the criteria for preferential credit terms from the World Bank. EKN did not guarantee any transaction covered by this policy during 2007. The transactions guaranteed for the countries in question during the year were made with private sector debtors, or with public sector purchasers where the amount was too small – below SEK 25 million – to be covered by the policy.

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