35 Environmental Organizations Condemn German Export Financing for China's Three Gorges Dam

(7 November, 1996 — Washington, DC) In a letter sent to Chancellor Helmut Kohl of Germany, the Environmental Defense Fund (EDF) and other leading US national environmental groups condemned the decision made by Germany’s export financing agency, the Hermes-Buergschaften, to grant loan guaranties totaling hundreds of millions of marks in support of China’s Three Gorges Dam project. The letter was signed by individuals from 35 organizations representing more than seven million people from 15 countries.

“The Hermes-Buergschaften decision defies international public opinion by supporting a project with well-documented environmental, economic and human rights problems,” said Bruce Rich, director of EDF’s International Program. “This decision, made in a closed-door meeting and revealed just days before a parliamentary debate on the issue, significantly undercuts international efforts to promote environmentally sustainable development and investment worldwide.”

In May of 1996 the US Export-Import Bank decided against supporting the Three Gorges Dam project following a review which highlighted serious questions about the dam’s environmental, social and economic sustainability.

“The Hermes-Buergschaften support for the Three Gorges Dam opens the competition for export credit agencies around the world to ignore the most minimal ecological, developmental and human rights criteria,” said Rich. “The tremendous economic and political repercussions of this decision, and the secrecy with which it was made, undercut Germany’s efforts since the 1992 Rio Earth Summit to be a global environmental leader.”

“If this decision is not reversed, the environmental and socioeconomic impacts would be devastating,” said Rich. “1.3 million people will be forcibly displaced by the dam’s 350 square mile reservoir. Irreversible changes in river flow will destroy habitat in the Yangtze River watershed, in downstream lakes, and in the River’s estuary. Furthermore, the resettlement plans lack adequate provisions for compensation funding, population distribution and public health protection.”

“We strongly urge Chancellor Kohl to take immediate action to reverse the Three Gorges Dam decision of the Hermes-Buergschaften,” said Rich. “The German government should work with other governments to achieve the highest levels of environmental, developmental, and social standards governing the lending, investment, and risk insurance practices of its national export credit and investment insurance agencies.”