On 1 April 2010, just before 8 o’clock in the evening, the UK’s Export Credits Guarantee Department (ECGD) scrapped its absolute ban on supporting projects overseas that involve child labour and forced labour.

ECGD is a government department that uses taxpayers’ money to provide subsidised insurance and guarantees to UK exporting companies against the risks of operating abroad (such as not being paid). In the past, ECGD has backed a range of environmentally and socially destructive projects – large dams, oil pipelines and arms sales – many of which have involved human rights abuses.

Until 2003, it was ECGD policy to back projects involving child or forced labour only in “exceptional circumstances”. Under pressure from non-governmental organisations and parliamentarians, however, it adopted an absolute ban on supporting such projects.

Now ECGD has in effect abandoned this ban. As of 1 May 2010, ECGD will not screen any projects requesting short-term (two years) export credits or projects of which the UK exporters’ share is worth less than £10 million. From now on, ECGD will approve such projects without assessing them at all for their potential environmental and human rights impacts, including their potential use of child and forced labour. (Since 2002, ECGD has screened and assessing all applications for ECGD support (except aerospace applications) for such impacts.)

ECGD is also doing away with its absolute ban on child and forced labour for projects where credit terms are longer than two years. Instead, it will use its discretion as to whether to support projects that potentially involve such labour.

ECGD’s list of countries for which it will provide support to UK companies exporting to them have poor records on child and forced labour. These include China (which has not signed the major international conventions against forced labour, such as the International Labour Organisation’s 1957 Abolition of Forced Labour Convention), India, Russia and Brazil (where an estimated 25,000-40,000 Brazilians are slave labourers).

ECGD’s new procedures mean that children and poorer adults in these countries will be at increased and continued risk of abuse and exploitation – all backed by the UK taxpayer.

Lawyers acting on behalf of The Corner House have issued a letter to ECGD’s Chief Executive laying out their intention to challenge the new policy in the courts by requesting a judicial review of the decision to drop the child and slave labour ban.

The Corner House argues that for ECGD to provide UK, taxpayer-backed, support for forced labour would amount to a breach of the European Convention on Human Rights (ECHR). Article 4 of this Convention places an absolute duty upon the state to prevent forced labour. As a government department, the ECGD has a positive obligation to ensure that it does not facilitate forced labour by taking reasonable steps – such as its previous process of screening and assessment – to avoid providing taxpayer support for it.

This article first appeared on The Corner House website. The original can be found here.