Taxpayers’ money could be used to fund child labour or slavery under new government proposals, campaign groups warned today.

In a joint submission to the Export Credits Guarantee Department’s public consultation,  Amnesty International UK, Jubilee Debt Campaign, The Corner House and WWF UK criticised the proposals, which would water down the ECGD’s human rights and environmental standards (so-called ‘Business Principles’) .

The ECGD is a government department which supports UK businesses exporting and wanting to invest in areas considered too risky to receive financial support from the private sector. It uses taxpayers’ money to guarantee payment in the event of a default.  The new proposals would mean the UK abandoning its own commitment to screen projects for their human rights and environmental impacts, and instead just follow weaker guidelines agreed by the Organisation for Economic Co-operation and Development (OECD).

One example of particular concern to campaigners is the weakening of the absolute prohibition on “harmful child labour” and forced labour. The proposed new rules mean that the ECGD could abandon screening for child and forced labour altogether, as it would be entirely discretionary.

The organisations are also concerned that some projects would no longer be subject to any form of assessment or due diligence under the new rules regarding environmental, social and human rights impacts, if the export value is less than £10 million, or the repayment term is less than two years. As all of the UK’s major competitors in the OECD currently screen all applications for support, regardless of their export value, campaigners are worried that a weakening of UK standards could lead others to follow suit.

The moves are believed to follow heavy lobbying from UK exporters, who argued last year that the 'Business Principles' should be "modified, if not scrapped altogether". Campaigners warn that a further watering down of standards would seriously undermine Britain’s claim to be a ‘force for progress’ in the world and could lead to taxpayer-funded projects fuelling human rights abuses, poverty and environmental damage.

Peter Frankental from Amnesty International UK said:

"UK taxpayers' money could end up funding child labour and forced labour overseas if these new rules are implemented. I don’t think anyone in the UK would find that acceptable.

“The government should be sending out a clear signal to companies that child exploitation is never acceptable - not putting up the funding to help them do it. It's time the government accepted the need for UK companies to respect human rights in all their business operations abroad."

Nick Dearden from Jubilee Debt Campaign said:

“When they introduced the Business Principles, the UK claimed to be leading the world - they now seem to be leading a ‘race to the bottom’ in terms of ethical and environmental standards. Supporting business at the expense of people and the environment in the developing world is completely unethical. It makes it even easier for a small minority to profit at the expense of the vast majority. British taxpayers should not be funding such exploitation.”  

Margaret Ounsley from WWF-UK said:

“These measures are a serious backward step, and would imply scrapping one of the few voluntary safeguards currently in place . We need an ECGD that can support and promote new green jobs capable of transforming our economy.”  

Nick Hildyard from The Corner House said:

“The ECGD is already a law unto itself – a government department excused from abiding by government commitments to human rights and the environment. The proposed changes will make it even easier for the ECGD to ride roughshod over government commitments. If the proposed changes go ahead, even the ECGD’s previous commitment not to fund projects involving forced labour and ‘harmful’ child labour would no longer be binding.”